Capital Model Act - Insurance Software development

Explain the ‘Risk-Based Capital Model Act’ and how is it important?

Author - Webner
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What is Risk-Based Capital?

The method for measuring the least measure of capital appropriate for a reporting entity to maintain its overall business operations in a reflection of its size and risk outline is known as Risk-Based Capital Model or RBC. It puts a limit on the quantity of risk that an organization can take. According to RBC, a company having a higher amount of risk should hold a higher amount of capital. A cushion is provided by capital to a company against solvency. It is not necessarily the whole sum of capital that an insurer […]

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