For a fee, Moody’s, at the request of an insurance company, analyzes the insurance company’s ability to pay claims. Specifically, Moody’s summarizes the likelihood that a company will be able to meet its policyholder obligations.Moody’s applies numerical gradations 1,2 and 3 in each rating classification: the gradation 1 indicates that the security ranking is in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking and the gradation 3 indicates that the issue ranks in the lower end of its generic rating category. For example, an “Aa2” rating would be in the middle third of all companies that received an excellent “Aa” rating.