Weiss Ratings

Reprinted with permission

Today's Librarian
November 1999

Weiss Ratings Inc. first gained national recognition in 1991 as the only rating agency in the country to warn the public in advance about the massive insurance company and bank failures that eventually impacted nearly 6 million Americans. Among the failed ventures were Bank of New England, Executive Life Insurance Company and Mutual Benefit Life.

As a result, the U.S. Congress asked the General Accounting Office (GAO) to study Weiss' rating track record in comparison to that of four other major rating agencies. In the published conclusions, the GAO noted that Weiss beat its closest competitor by a factor of 3:1 in warning consumers of future financial difficulties. The GAO also noted that Weiss rated more insurers than any of the other rating agencies, providing the most comprehensive coverage of the industry.

Martin Weiss, Ph.D., chairman of Weiss Ratings, attributes his company's superior rating accuracy to its unique approach. "We work for the consumer - not the companies," Weiss says. "Other rating agencies get paid very substantial fees by the companies they are evaluating. Worse, most give the companies a preview of the rating prior to publication along with the option to suppress publication if the company is unhappy with its rating."

Staunch Objectivity

"Weiss Ratings doesn't do business that way. We don't accept a dime from the companies we rate. Nor do we bow to requests to suppress publication of unfavorable ratings."

Due to a reputation for staunch objectivity, Weiss has been invited to testify before the Senate, the House of Representatives, state legislatures, and the National Conference of Insurance Legislators regarding insurance-company stability. Weiss Ratings also has been a primary source for special studies by the GAO, the U.S. Office of Management and Budget and the national press.

Tracking HMOs

Today, Weiss Ratings tracks more than 16,000 financial institutions - not only insurance companies and banks, but also brokerage firms and HMOs - using the same approach that earned the company accolades from the GAO.

In addition, Weiss evaluates the risk-adjusted performance of more than 5,000 mutual funds with plans to expand coverage to 8,000 funds by the end of this year.

Weiss Ratings is the only agency to track the majority of HMOs in the United States and the only agency to evaluate each HMO's performance on a quarterly basis.

"There is a surging interest in HMOs right now, and it's bound to increase as the industry heads toward a very disruptive shakeout," Weiss says. "Millions of HMO members, employers, and doctors are already looking for ways to protect themselves from HMOs that are financially troubled and most likely to jack up rates or cut back on service quality. As a result, we're seeing a big increase in the demand for HMO information by the public - on radio talk shows, in the mail and especially in the nation's libraries."

In response to this increased interest, Weiss has recently expanded its coverage of the HMO industry to include 711 companies, representing 97 percent of the nation's estimated 79 million HMO members.

Weiss provides other key information to assist consumers, as well. For instance, Weiss' Guide to HMOs and Health Insurers reveals the frequency of complaints lodged against various HMOs to help consumers evaluate customer satisfaction. Another example is Weiss' Guide to Brokerage Firms, which incorporates the commission rates being charged by stockbrokers as well as the services they offer to investors.

"We're in business to provide the public with unbiased and accurate tools to help them make informed choices in the selection of financial services and investments. And we've found that public libraries give us the best opportunity to help these individuals gain access to our materials," Weiss says.

In all, Weiss publishes six ratings publications covering the financial services sector:

• Guide to Life, Health and Annuity Insurers
• Guide to Property and Casualty Insurers
• Guide to HMOs and Health Insurers
• Guide to Banks and Thrifts
• Guide to Brokerage Firms
• Guide to Mutual Funds

Weiss Ratings currently provides librarians a substantial discount on its publications. To inquire about the discount or to receive a catalog, contact (800)289-9222; P.O. Box 109665, Palm Beach Gardens, FL 33410; or visit www.weissratings.com.