What is the Definition of Risk-Based Capital?

What is the Definition of Risk-Based Capital?

The need for insurance companies to be capitalized according to the inherent riskiness of the type of insurance they sell. Higher risk types of insurance, liability as opposed to property business, generally necessitate higher levels of capital.

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Annuity?

What is the Definition of Risk-Based Capital?

You can find random definition and meaning of insurance terms below:

What is the meaning of Stock Insurance Company

business owned by stockholders.

What is the meaning of Stop Loss/Excess Loss

individual or group policies providing coverage to a health plan, a self-insured employer plan, or a medical provider providing coverage to insure against the risk that any one claim or an entire plan's losses will exceed a specified dollar amount.

What is the meaning of Structured Securities

loan-backed securities that have been divided into two or more classes of investors where the payment of interest and/or principal of any class of securities has been allocated in a manner that is not proportional to interest and/or principal received by the issuer from the mortgage pool or other underlying securities.

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