Abstract: A composition for an insulating collar of a metal oxide varistor, with the composition being applied as a slurry to a green varistor in an unfired state along its periphery for enhancing the varistor's energy handling capability in a fired state, the composition having, in various combinations, a plurality of oxide compounds, including manganese dioxide, cobaltic-cobaltous oxide, nickel oxide, tin dioxide, chromic oxide, bismuth oxide, antimony trioxide, and zinc oxide. Moreover, a method of applying the slurry onto the unfired varistor and firing the coated green varistor in a single step.