Insurance Carrier Rating

Requirements

All property and liability insurance carriers for new policies must:

• if rated by A.M. Best Company, have a 
  • general policyholder rating of A- or better, and
  • financial size category of VI or better; or
• if rated by Demotech, Inc., have a 
  • Financial Stability Rating of A or better, and
  • policyholder surplus of at least $40 million.

For any existing insurance policy (at origination or afterward), the carrier must: 

• if rated by A.M. Best Company, have a
  • general policyholder rating of B++ or better, and
  • comply with the rating requirements for new policies at renewal; or
• If rated by Demotech, Inc., comply with the rating requirements for new policies.

This rating requirement does not apply to the following coverages:

• state wind pools or state funds, if they are the only coverages that can be obtained for a PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ; or
• flood insurance issued by the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. (NFIP) or written by companies approved under the NFIPNFIPProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. ’s Write Your Own program.

Per the Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. , you must require the BorrowerBorrowerPerson who is the obligor per the Note. to immediately obtain replacement coverage with a compliant carrier, even if the policy has not yet expired, if a carrier is downgraded below

• B++, if rated by A.M. Best Company, or
• A, if rated by Demotech, Inc.