Calculate risk-based capital and interpret what the result says about an insurer's solvency position.
Free CAS Exam 6-U.S. (Regulation and Financial Reporting) lesson in Financial Reporting, Taxation, and Professional Responsibilities of the Actuary. 19 min read, ~2,806 words.
The P&C RBC formula has eight risk categories: R0 (affiliates and off-balance-sheet), R1 (fixed-income asset risk), R2 (equity asset risk), R3 (credit/reinsurance recoverable risk), R4 (loss and LAE reserve risk), R5 (net written premium risk), Rcat (catastrophe risk, added 2017), and basic operational risk. LAE is the cost of investigating...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- C3
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