RBC Action Level
Compare an insurer RBC ratio with caller-supplied action thresholds.
Description
An RBC ratio compares adjusted capital with an authorized-control-level capital basis.
An RBC ratio compares adjusted capital with an authorized-control-level capital basis. Caller-selected thresholds map it to action labels.1
Compare an insurer RBC ratio with caller-supplied action thresholds.
When to use RBC Action Level
Use this tool to compare an insurer RBC ratio with caller-supplied action thresholds.
Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.
How to use RBC Action Level and understand its results
- Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.
- Enter totalAdjustedCapital, authorizedControlLevelCapital, companyActionThresholdPercent, regulatoryActionThresholdPercent using the field table and calculation rules, then run the tool.
- Read rbcRatioPercent, actionLevel, companyThresholdMargin. The explanation below defines the units, signs, ordering and any flags or placeholder values.
- If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.
| Input field | Meaning | Value type; see rules below | Requirement |
|---|---|---|---|
| totalAdjustedCapital | Total adjusted capital | number; minimum: 0 | Required |
| authorizedControlLevelCapital | Authorized control-level capital | number; minimum: 0 | Required |
| companyActionThresholdPercent | Company action threshold (%) | number; minimum: 0 | Required |
| regulatoryActionThresholdPercent | Regulatory action threshold (%) | number; minimum: 0 | Required |
Enter nonnegative adjusted capital/thresholds and strictly positive control capital. Return ratio, company margin and label: below regulatory threshold first, otherwise below company threshold, otherwise adequate. Equality passes that threshold.
ratio%=100adjustedCapital/controlCapital; margin=ratio−companyThreshold Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.
| Output field | Meaning | Value type |
|---|---|---|
| rbcRatioPercent | RBC ratio (%) | number; minimum: 0 |
| actionLevel | Action level | string; one of "adequate", "company-action", "regulatory-action" |
| companyThresholdMargin | Margin over company threshold (percentage points) | number |
{
"input": {
"totalAdjustedCapital": 250,
"authorizedControlLevelCapital": 100,
"companyActionThresholdPercent": 200,
"regulatoryActionThresholdPercent": 150
},
"output": {
"rbcRatioPercent": 250,
"actionLevel": "adequate",
"companyThresholdMargin": 50
}
}Limitations and assumptions
Threshold order is not validated. No current regulatory threshold, capital formula, trend test or regulatory action is established.
Numeric inputs must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.
Alternative or Complementary methods
Use SAP–GAAP Surplus Bridge: Bridge GAAP equity to statutory surplus using supplied adjustments. For a complementary task, use PML Aggregation: Aggregate modeled occurrence losses into a caller-parameterized PML.
References
-
RBC Action Level — tool.io
Similar or alternative tools
- SAP–GAAP Surplus Bridge
Bridge GAAP equity to statutory surplus using supplied adjustments.
- PML Aggregation
Aggregate modeled occurrence losses into a caller-parameterized PML.