We recommend adjusting the…

We recommend adjusting the minimum AM Best rating to an “A- Excellent” Rating. AM Best’s Financial Strength Rating (FSR) is an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. AM Best’s opinion is based on a comprehensive quantitative and qualitative analysis of the insurer's balance sheet strength, operating performance, business profile, and enterprise risk management.

The “A-“ rating is assigned only to insurance companies that, in the opinion of AM Best, have an excellent ability to meet ongoing insurance obligations. Both the “A-” and “A” ratings fall under the AM Best “excellent” categories, with only subtle differences between the two. Most obligees in Ontario already accept a minimum AM Best “A-“ rating from issuers of standard contract surety performance bonds, with many municipalities in Ontario and across Canada also accepting subdivision bonds from issuers with AM Best “A-“ Ratings.

We believe permitting a minimum AM Best A- Rating will allow a greater number of highly experienced insurance companies to participate in this space, while providing more choice to developers and continuing to offer Ontario municipalities with excellent credit ratings backing subdivision bonds.