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Flashcards in R3 Deck (6)
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1

R3 covers

Risk that counterparty will default and risk associated with estimating the amounts due

2

R3 generated from

Non-invested assets
Reinsurance recoverable
Health credit risk

3

RBC charge, non-invested assets

0.05 * net admitted value

4

RBC charge, investment income due and accrued

0.01 * net admitted value

5

RBC charge, reinsurance recoverables

0.1 * recoverable (taken from schedule F, reduced by provision for reinsurance); half allocated to R3, half to R4

6

Criticism of 10% charge for reinsurance recoverables

Does not differentiate by reinsurer strength, or whether recoverables have been collateralized