An Overview and Comparison of Risk-Based Capital Standards
Journal
Journal of Insurance Regulation
ISSN
0736-248X
Type
journal article
Date Issued
2008-09-10
Author(s)
Abstract
This article provides an overview and comparison of risk-based capital (RBC) requirements as they currently exist in the United States, the European Union, Switzerland, and New Zealand. These four systems are representative of different ways capital standards are implemented around the globe. The United States uses a static factor model; Switzerland considers dynamic cash-flow-based approaches; New Zealand integrates private rating agencies into its supervisory process. Other differences between these three countries include the use of different risk measures, the use of internal models, and varying consideration of operational risk and catastrophe risk. Regulators in the European Union are being influenced by all three of these approaches as they finalize the design of their new regulatory framework Solvency II. We integrate the current version of this approach in our analysis.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
NAIC Insurance Products and Services
Volume
26
Number
4
Start page
31
End page
60
Pages
30
Subject(s)
Division(s)
Eprints ID
46796