A new Best’s Special Report addresses frequently asked questions (FAQ) about AM Best’s treatment of cell captive insurance companies and other alternative risk transfer (ART) entities within the framework of its Best’s Credit Rating Methodology.

The original source-language text of this announcement is the official, authoritative version. Translations are provided as an accommodation only, and should be cross-referenced with the source-language text, which is the only version of the text intended to have legal effect.’s criteria procedure, “Rating Captives and Other Alternative Risk Transfer Entities,” was revised in 2025 to map out how cell companies are viewed within Best’s Credit Rating Methodology and establish a path to assigning Best’s Issuer Credit Ratings and Best’s Financial Strength Ratings to such entities. A cell company is a flexible ART structure that can support multiple users and sponsors across various insurance and financial activities; its types include incorporated, unincorporated and mixed cell companies. Other types of ART entities AM Best rates are single-parent and pure captives; group captives; risk retention groups (RRGs); and self-insurance funds. Each structure has distinct ownership, regulatory and risk-sharing characteristics.

Among the questions addressed in this FAQ:

What is AM Best’s rating process for cell companies? Cell companies encompass multiple, complex and specialized lines of business. Accordingly, AM Best expects the cell company sponsor to provide a comprehensive information package, including, but not limited to, audited financial reports for the cell company and any incorporated cells, key agreements, business plans, licenses, and (re)insurance policies.

How do the jurisdiction and regulatory framework of a cell company impact the rating analysis? AM Best considers the jurisdiction and regulatory framework governing a cell company as part of its rating analysis. Given evolving regulatory frameworks and the increasing use of cell companies for innovative (re)insurance transactions, AM Best may also conduct additional analysis, including discussions with jurisdictional authorities, third-party legal reviews, and consultations with external actuaries.

What are the balance sheet strength considerations for different types of cell companies? AM Best views unincorporated cell companies as only as strong as its weakest cell. Each cell must be adequately capitalized. The balance sheet strength analysis focuses on the individual cells, including the potential for a cell to erode its own capital or that of the broader company. An incorporated cell company’s balance sheet strength assessment focuses on segregated funds, stress scenarios, financial flexibility and access to additional funding if needed.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=370606.

AM Best’s criteria procedure, “Rating Captives and Other Alternative Risk Transfer Entities,” is available at http://www.ambest.com/ratings/methodology.asp.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20261112073551/en/