Carrier Vetting Author: Hans Goldstein, NPN 20602398 Last updated: 2026-06-27

How to Vet an Annuity Carrier Before Buying

TL;DR

Vetting an annuity carrier takes seven steps and roughly 20 minutes: (1) AM Best rating A- or better; (2) Comdex score 80+ (90+ for large purchases); (3) RBC ratio above 400%; (4) state guaranty cap verification at NOLHGA; (5) reading the AM Best rating rationale, not just the letter; (6) NAIC complaint history; (7) renewal-rate history for FIAs. Skipping these steps is the source of most “I didn't know” outcomes years later.

The short answer

A complete carrier vetting fits in a single afternoon. The checklist:

AM Best Financial Strength Rating — A- minimum, A or better preferred.
Comdex composite score — 80+ minimum, 90+ for amounts above state cap.
Risk-based capital (RBC) ratio — 400%+ healthy.
State guaranty fund cap — verify at nolhga.com; stay below cap per carrier.
Rating rationale — read the actual AM Best analyst commentary, not just the letter.
NAIC complaint history — pull from naic.org/cis.
Renewal-rate history (FIA only) — pull from independent producer or carrier marketing.

Why this matters

“My agent told me they were highly rated” is the most common explanation for buyers who end up with a B+ carrier or worse. The buyer relied on a generic adjective (“highly rated,” “A-rated”) rather than verifying the actual rating and rationale.

The vetting checklist takes 20 minutes. The carrier lock-up is typically 5-15 years. The asymmetry justifies the time.

Step-by-step walkthrough

Step 1: AM Best Financial Strength Rating

Go to ambest.com. Free registration. Search the carrier. Look for:

Letter rating — A- or better.
Outlook — Stable or Positive (not Negative).
Date of last rating action — should be within 18 months.
Watch designation — Under Review with Negative Implications = defer.

Step 2: Comdex composite score

Comdex consolidates AM Best, S&P, Moody, and Fitch into a 0-100 percentile. Ask any independent producer to pull it. Look for:

90+ = top tier; suitable for any amount.
80-89 = solid; suitable for amounts within state cap.
Below 80 = at least one rating agency has a concern.

Step 3: Risk-based capital ratio

Pull the carrier most recent statutory annual statement (available through state insurance department websites or third-party data providers). The RBC ratio at year-end is reported. Look for:

Above 400% = healthy capital.
300%-400% = adequate but not strong.
Below 300% = regulator attention zone.

Step 4: State guaranty fund cap

Go to nolhga.com. Look up your state. Confirm the annuity cap and what it covers (present value of benefits, accumulated value, or both). Plan to stay below the cap per carrier per contract.

Step 5: AM Best rating rationale

The rating letter is the headline; the rationale is the article. AM Best publishes a 2-4 page rationale document for each rating action. Look for specific commentary on:

Capital adequacy — is the carrier well-capitalized for its risk profile?
Asset risk — what is in the bond portfolio? Are there material exposures to lower-rated structured securities?
Operating performance — is the carrier profitable and growing?
Business profile — diversified or concentrated? Strong distribution or limited?

Step 6: NAIC complaint history

Go to naic.org/cis (Consumer Information Source). Search the carrier. The complaint index compares the carrier complaint volume vs. industry average for its size. Look for:

Index below 1.00 = below-average complaints.
1.00-2.00 = around average.
Above 2.00 = above-average complaints; investigate the categories (claims, marketing, underwriting).

Step 7: Renewal-rate history (FIA only)

For fixed indexed annuities, renewal-cap behavior in years 2-7 determines the long-term value. Ask your producer for the carrier renewal-rate history on similar product series over the past 5 years. Carriers that aggressively cut caps post-issue earn a discount in this dimension; carriers that maintain renewal caps near issue caps earn a premium.

Worked example: vetting a hypothetical carrier

Carrier X offers a 5-year MYGA at 6.1%. Vetting:

Check	Result	Pass / Fail
AM Best	A-, Stable outlook	Pass (within A- minimum)
Comdex	82	Pass for amounts within state cap
RBC ratio	425%	Pass (above 400%)
State cap (CA resident)	$250K	Pass if contract size at or below $250K
Rationale	Cites strong capital, notes elevated private-credit exposure	Pass with awareness — asset mix is more aggressive than peers
NAIC complaint index	0.74	Pass (below industry average)
Renewal history	N/A (MYGA, fixed rate for term)	N/A

Verdict: Pass for $250K contract size for a California resident. The asset-mix note is real but not disqualifying given the rating and cap structure.

Common misconceptions

“My agent recommendation is enough vetting.” No. Agents have appointment incentives. Independent verification is a 20-minute task that does not depend on anyone recommendation.

“All A-rated carriers are equivalent.” False. A and A- differ; outlook differs; rationale differs. The letter is a headline, not the whole story.

“The rating only matters if the carrier might fail.” Ratings also predict customer service quality, claim-payment behavior, and renewal discipline. Higher-rated carriers tend to do all three better.

When the checklist changes

For amounts above the state cap: Add a deeper read of the rating rationale and elevate Comdex requirement to 90+.
For income riders or lifetime SPIAs: Add a 20-year-view check on the rating — has the carrier been stable at A or better for the past decade?
For PE-owned carriers: Add specific review of the asset mix commentary in the rating rationale.
For FIAs: Add renewal-rate history. Critical for long-term value.

Frequently Asked Questions

How long does it take to vet an annuity carrier?

About 20 minutes if you have the carrier name and your state of residence. Most of the data is free and online.

What rating is good enough for an annuity carrier?

AM Best A- or better, Comdex 80+ for amounts within state guaranty cap. A or better and Comdex 90+ for larger amounts.

Where do I find the AM Best rating?

ambest.com — free registration. Search by carrier name. Look at the most recent rating action and the rationale PDF.

Is the RBC ratio public?

Yes. State insurance departments publish carrier annual statements which include the RBC ratio. Some third-party tools (S&P Capital IQ, AM Best BestLink) consolidate the data.

Does carrier vetting matter if I am within the state guaranty cap?

Yes — even within the cap, a failure means weeks to years of administrative process. Higher-rated carriers are less likely to put you in that process at all.

What does a complaint index of 2.50 mean?

The carrier received 2.5 times the industry-average complaint volume for its size. Investigate the categories (claims handling vs. marketing vs. underwriting) before deciding if it is a deal-breaker.

Should my advisor share the rating rationale with me?

Yes. If they refuse or cannot produce it, that is a signal. Independent producers and broker-dealers have routine access to all carrier rating rationales.

Are there carriers I should never consider?

Categorically: AM Best below B+, or any carrier currently under regulatory action. Case-by-case: B+ to B++ depending on amount and product type.

Get an independent safety review on your specific carrier or bank

Talk to a licensed independent expert. Hans.

Safety questions look simple until you read the contract. Carrier ratings change. State caps change. FDIC ownership categories are tricky at higher dollar amounts. Get a written independent review before you commit principal to a multi-year contract.

Drop your info — within 24 hours, you will get a written independent review of your specific situation: carrier or bank vetting, state guaranty/FDIC verification, and a no-pressure 15-minute call if you want one.

Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers

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Disclosure

This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product. Rates, ratings, state guaranty caps, FDIC rules, and tax treatment change frequently. Always confirm current values against the most recent carrier or bank disclosure documents and the actual contract before purchasing. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers. The producer specific appointment status with any carrier discussed may vary, and this article is not an endorsement or representation of carrier appointment. No compensation has been received from any carrier or bank in connection with the publication of this article. Always read the actual contract and consult a licensed advisor before purchasing any annuity, CD, or other financial product. Past performance does not predict future returns. AM Best ratings, Comdex scores, and tax treatment are subject to change. Historical bank and insurance failure outcomes described herein are based on publicly available regulatory and news sources and may include minor inaccuracies; do not rely on this article as a primary source.