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 […]