Joseph M. Belth, editor of the Insurance Forum, an excellent Elletsville, Ind., newsletter, is calling for greater disclosure of insurance company financial ratings.

After all, the most important consideration when purchasing insurance is the insurer's financial strength and claims-paying ability. There's no sense having insurance if your insurer can't pay your claim when you need it most.

Even if nothing comes from Mr. Belth's plea, why not pose his recommended disclosure demands to your insurer on your own?

• Information on the insurance company's ratings -- prior to your purchase of a policy -- not just at the time of sale.

• Information about your insurer's ratings on an annual basis.

• Prompt notification if your insurer's ratings change.

• Disclosure of ratings by all major ratings firms. Those include A.M. Best, Fitch, Moody's and Standard & Poor's. "A company should not be allowed to select which ratings are disclosed," Mr. Belth says. "For example, Executive Life Insurance Co., before it collapsed in 1991, advertised its high ratings by two of the four major ratings firms, but did not disclose its lower ratings by the other two rating firms."

• Disclosure of which rating firms have not rated the company.

• Disclosure if a company has no ratings. "Many companies are not rated by any of the major rating firms," Mr. Belth notes, "and ratings generally are withdrawn at company request."

• Disclosure if a rating is under review, and the likely direction of the rating change as well as rating outlooks.

• What each rating means, using the rating firm's brief description, consisting of one or two words. Also, an explanation of where the rating fits in among a rating firm's categories.

It's easy to get your mind boggled by insurance company ratings. The ratings have different meanings, depending upon the rating agency you select. While "B" may sound like an "Honor roll" grade, based on all the years you've spent in school, it's not necessarily the greatest in the world of ratings.

And rating scales vary by agency.

Insurance company investors are privileged, Mr. Belth says. There is greater disclosure of ratings in insurance company annual reports.

Incidentally, annual reports are public information, and you often can get them at www.sec.gov. But again, consider what ratings agencies may not be mentioned in the discussion, and try to learn why.

Other considerations when you buy insurance:

• Whether the company is registered to do business in your state.

• The cost and whether it's worth it. Insurance is one of the most costly financial products.

• How much you're insuring. While state guaranty associations provide some measure of protection if your insurer goes belly-up, it's not much, and there often are limitations. Read about your state's coverage through the National Organization of Life & Health Guaranty Associations at www.nolhga.com. If the amount of insurance you want appears to exceed the protection of your state's guaranty association, consider buying insurance from more than one company.

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