7. The risk-based capital charges for a property-casualty insurance company are provided below. The insurer has...
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7. The risk-based capital charges for a property-casualty insurance company are provided below. The insurer has total capital and surplus of $238.66 M. Risk Asset risk--OBS and affiliated P&C (RO) Asset risk--fixed income (R1) Asset risk--equity (R2) Credit risk (R3) RBC Charge ($ millions) $ 5.34 4.53 9.45 8.65 57.86 34.76 65.23 Underwriting risk-premium (R4) Underwriting risk-reserve (R5) Catastrophe risk (Rcat) a. Calculate the (i) risk-based capital (RBC) and (ii) RBC level for the insurance company. (7 points) b. What supervisory action level applies to this insurer? Support your response with the calculation results from a. (3 points) 7. The risk-based capital charges for a property-casualty insurance company are provided below. The insurer has total capital and surplus of $238.66 M. Risk Asset risk--OBS and affiliated P&C (RO) Asset risk--fixed income (R1) Asset risk--equity (R2) Credit risk (R3) RBC Charge ($ millions) $ 5.34 4.53 9.45 8.65 57.86 34.76 65.23 Underwriting risk-premium (R4) Underwriting risk-reserve (R5) Catastrophe risk (Rcat) a. Calculate the (i) risk-based capital (RBC) and (ii) RBC level for the insurance company. (7 points) b. What supervisory action level applies to this insurer? Support your response with the calculation results from a. (3 points)
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Answer a i RBC ratio total adjusted capital Risk based capital 534453945865578634766523 238... View the full answer
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
Posted Date:
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