Insight and Intelligence on the London & International Insurance Markets

19 April 2018

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NAIC RBC changes could favour higher-rated reinsurers

David Bull 14 February 2017

Proposed changes to the credit risk charge in the National Association of Insurance Commissioners (NAIC)'s risk-based capital (RBC) calculation could give the highest-rated reinsurers a competitive advantage.

The US regulatory body's current RBC model requires insurers to hold capital equal to a flat 10 percent charge on reinsurance recoverables irrespective of the reinsurer's rating or whether it is collateralised or not.

But proposals expected to come into effect between the 2018 and 2019 reporting year would employ a more risk-based...

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This article was published as part of issue February 2017/2

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