R3 Flashcards
1
Q
R3 covers
A
Risk that counterparty will default and risk associated with estimating the amounts due
2
Q
R3 generated from
A
Non-invested assets
Reinsurance recoverable
Health credit risk
3
Q
RBC charge, non-invested assets
A
0.05 * net admitted value
4
Q
RBC charge, investment income due and accrued
A
0.01 * net admitted value
5
Q
RBC charge, reinsurance recoverables
A
0.1 * recoverable (taken from schedule F, reduced by provision for reinsurance); half allocated to R3, half to R4
6
Q
Criticism of 10% charge for reinsurance recoverables
A
Does not differentiate by reinsurer strength, or whether recoverables have been collateralized
