// definition
RBC
Risk-based capital
Short definition
A US prudential framework that assesses an insurer’s capital needs according to its risks. For life insurers, the calculation aggregates investment, underwriting, interest-rate and business risks, together with exposures to insurance affiliates, accounting for dependencies among them. The RBC ratio divides total adjusted capital by Authorized Control Level RBC, the denominator used for intervention thresholds. An asset risk factor is one input to this calculation.
risk atlas
Knowledge map
Intuition
An asset risk factor enters a broader calculation, after which the capital ratio locates the insurer relative to intervention thresholds.
Formula
RBC ratio = total adjusted capital / Authorized Control Level RBCRelated analyses
Related guides
Primary sources
- NAIC, Risk-Based CapitalRisk categories, dependencies, diversification and the ratio of capital to ACL RBC.
- NAIC, adopted CLO factors for year-end 2026LR002 asset factors, portfolio adjustment and separate stages of the calculation.