A property casualty insurance company has estimated the following required charges for its various risk classes (in millions) a What is the RBC charge as per the model recommended by the NAIC b If the firm currently has $8 million in capital, what should be its surplus to meet the minimum capital r...

a b It needs to hold a minimu ...

A property-casualty 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):

RBC Charge $1 Description Affiliated P/C Risk R1 Fixed income 2. Common stock R2 R3 Reinsurance Loss adjustment expense

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

b. If the firm currently has $8 million in capital, what should be its surplus to meet the minimum capital requirement?

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Financial Institutions Management A Risk Management Approach

ISBN: 978-1259717772

9th edition

Authors: Anthony Saunders, Marcia Millon Cornett

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Question Posted: May 30, 2019 11:55 AM

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

Question:

RBC Charge $1 Description Affiliated P/C Risk R1 Fixed income 2. Common stock R2 R3 Reinsurance Loss adjustment expense Written premiums Loss adjustment expense Written premiums R4 2 R5 3 R4 3 R5 $20 Total

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a b It needs to hold a minimu...View the full answer

Financial Institutions Management A Risk Management Approach

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