Risk-Based Capital (RBC) Requirements

Risk-Based Capital (RBC) requirements are regulatory standards that determine the minimum amount of financial resources an insurance company must hold to remain solvent and protect policyholders. These requirements adjust based on the company’s specific risk levels—such as the types of policies it offers and its investment holdings—ensuring it has enough capital to cover potential losses. Essentially, RBC helps ensure that insurance companies are financially stable and capable of fulfilling their promises, maintaining trust and stability in the insurance industry.