Difference between revisions of "RBC for Holding Companies"
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market(HC) = 600 ''(market value of holding company HC)'' | market(HC) = 600 ''(market value of holding company HC)'' | ||
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ownership % = 80% ''(insurer holds this percentage ownership in the holding company) | ownership % = 80% ''(insurer holds this percentage ownership in the holding company) | ||
Revision as of 13:34, 8 September 2019
This is an example of how to calculate the R1 and R2 charges when the insurer owns shares in a holding company. Note: The calculation is essentially the same for R1 and R2. The only difference is that you use only fixed income assets for R1 and only equity assets for R2.
Given:
market(HC) = 600 (market value of holding company HC)
ownership % = 80% (insurer holds this percentage ownership in the holding company)
type of asset book value of asset
(fixed income)distribution subsidiary 1 100 20% subsidiary 2 300 60% cash 50 10% other assets 50 10%
Solution:
