A propertycasualty insurance company has estimated the following required charges for its various risk classes (in millions):

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A property–casualty insurance company has estimated the following required charges for its various risk classes (in millions):

Risk Description RBC Charge R0 Affiliated P/C $ 2 R1 Fixed income 3 R2 Common stock 4 R3 Reinsurance 3 R4 Loss adjustment expense 2 R5 Written premiums 3 Total $17

a. What is the RBC charge per the model recommended by the NAIC?

b. If the firm currently has $7 million in capital, what should be its surplus to meet the minimum capital requirement?

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Financial Institutions Management

ISBN: 9780078034800

8th Edition

Authors: Anthony Saunders, Marcia Cornett

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Question Posted: Jul 26, 2024 10:00 AM

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A propertycasualty insurance company has estimated the following required charges for its various risk classes (in millions):

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Financial Institutions Management

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