Insurance rater opposes printing of its rankings

STAYING AHEAD

December 19, 1993|By JANE BRYANT QUINN | JANE BRYANT QUINN,1993, Washington Post Writers Group

NEW YORK -- In recent years, a publication called The Insurance Forum has provided a splendid service to investors -- a service now being threatened by a lawsuit.

Each August, Forum publishes safety ratings of virtually all the active life- and health-insurance companies. You get the opinions of all five rating services, which don't always agree on how sound a company is. You also get any changes from the year before, so you can see whether a company is improving or weakening.

A.M. Best, the largest insurance rater, wants to opt out of this. It has sued the Forum's editor, Joseph M. Belth, a professor emeritus of insurance at Indiana University, to prevent him from using A.M. Best ratings.

"It's a copyright case," says Best's general counsel, John Grillos. "We have a proprietary right to our own ratings and can control the manner in which they are distributed."

"It's a First Amendment case," says Belth, who maintains that he has a right to publish. "It is news when a rating agency assigns or changes an insurer's rating."

He also thinks that consumers and insurance agents should be able to see at a glance the safety ratings assigned to any insurer.

Belth's Special Ratings Issue, which last time covered 1,437 insurance companies, tells how each was rated by the rating services: A.M. Best, Standard & Poor's, Moody's, Duff & Phelps and Weiss Research. Best, S&P and Weiss cover most of the companies; Moody's and Duff & Phelps have shorter lists.

This year's issue highlighted the 110 insurers that garnered high rankings from at least three rating companies. For a copy of the Special Ratings Issue (not the last, I hope), send $10 to The Insurance Forum, P.O. Box 245, Ellettsville, Ind., 47429.

Best sells its own ratings reports. The latest life/health edition of Best Insurance Reports contains nearly 3,000 pages and costs $600.

There's a Bestline service, which gives ratings over the phone. You call Best's Customer Service Department (908-439-2200) and ask for the insurer's Best identification number (or look it up in Best Insurance Reports in a library). Then you call 900-555-BEST for the latest rating. The 900 number costs $2.50 a minute and lasts about a minute for each insurer.

But Bestline doesn't tell you how your insurer was rated last year, so you don't know whether the rating changed. "You can go through your insurance agent for that information," Grillos says.

One alternative: Best sells financial reports on individual companies for $20. The reports include ratings for the past five years. But most of A.M. Best's revenue comes from the insurance industry, not from consumers.

Standard & Poor's Steven Dreyer, head of insurance solvency review, says, "We consider Joe Belth one of the press and don't inhibit him from making our ratings public."

S&P gives consumers its ratings free. Call (212) 208-1527. Its revenue comes from the industry. So do those of Moody's and Duff & Phelps.

Martin Weiss of Weiss Research, by contrast, gets no fees from the insurance companies he rates. He sells his ratings to consumers for $15 each ($25, if you also want a brief company report). Call (800) 289-9222.

"Theoretically, we might feel our copyright has been infringed," Martin Weiss says. "In practice, I have no intention of taking any action against an individual who is helping get good information to consumers."

Belth says the first sign of trouble with A.M. Best came in a 1989 phone call from Best's president, Arthur Snyder, objecting to Forum's list of insurers whose ratings Best had cut.

"Mr. Snyder gave me the impression that his call was prompted by complaints he had received from companies with lowered ratings," Belth writes in the latest edition of The Insurance Forum. "He said he had no problem with my publishing lists of top-rated companies."

Grillos says insurer complaints have nothing to do with it. "It's one thing for Belth to publish the companies that meet his [top-rated] criteria," Grillos says. Best would still permit him to do so. "But he's selling the ratings for all the companies."

Belth plans to fight the lawsuit with the help of the Public Citizen Litigation Group in Washington.

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