Life Financial Reporting - Risk-Based Capital and Target Surplus

Derived from our Life Financial Reporting public seminar, this course is a discussion of the concept and application of the Risk-Based Capital requirement for Life Insurance Companies.

CPE Credits: 1 hour in Accounting

Level: Basic

Prerequisites/Advance Preparation: None

NASBA Publication/Revision Date: May 2020

Learning Objectives

• Identify the purpose and impact of the RBC requirement
• Differentiate between the key risks measured by RBC
• Interpret the RBC ratio formula
• Differentiate between the four RBC action levels
• Identify the GAAP target surplus concept

Outline

• History of the Risk-Based Capital Requirement
• Purpose of the Risk-Based Capital Requirement
• Risk Categories
• The Risk-Based Capital Formula
• Calculation of Total Risk-Based Capital
• The Risk-Based Capital Ratio
• Compliance Issues resulting from the Risk-Based Capital Requirement
• GAAP target surplus