RBC for class discussion 2016

RBC for class discussion 2016 - US Statutory Framework...

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US Statutory Framework Reserves Generally thought to cover a 75-85% event Subject to an Actuarial Opinion supported by Asset Adequacy Analysis Risk-Based Capital (RBC) Overview - Legal entity specific annual calculation, developed by the NAIC to help state insurance departments regulate company solvency
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Overview of US Risk-Based Capital (RBC) Separate Formulas for Life, Property & Casualty and Health Insurers – Focus on material risks Measure the minimum amount of capital to support its overall business operations in consideration of its size and risk profile The degree of risk taken by the insurer is the primary determinant US Regulators use RBC to identify weakly capitalized companies Model law provides for Regulatory Authority for timely action Other (e.g., rating agencies) may use RBC to determine strength of company
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RBC Calculation Five Main Categories of Risk C0 - Affiliate Asset Risk : Asset default for certain affiliated investments and off-balance sheet items. Includes derivatives for Life Insurance companies.
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