Market Overview

A.M. BestTV: How A.M. Best Analysts Evaluate Mortgage-Related Insurance-Linked Securities Transactions


In this A.M.BestTV episode, Emmanuel Modu, managing director,
insurance-linked securities, and Wai Tang, director, insurance-linked
securities, A.M. Best, examine how the rating agency evaluates
mortgage-related insurance-linked securities (MILS) transactions. Click
to view the entire program.

Mortgage-related insurance-linked securities transactions are relatively
new to the market, according to the episode, and are collateralized and
used as a substitute for traditional reinsurance.

"One important factor in analyzing mortgage insurance is risk-in-force,"
said Modu. "Risk-in-force determines the maximum exposure faced by
mortgage insurers to losses. In other words, risk-in-force equals
mortgage insurance coverage percentage plus unpaid principal balance."

"A.M. Best rates mortgage-related insurance-linked securities by using
the following information: (1) transactions that will be assigned a
Long-Term Issue Credit Rating based on A.M. Best's 21-point scale; (2)
methodology and criteria; (3) information review; and (4) qualitative
considerations," said Tang.

To view this entire webinar visit

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