Solvency II Standard Formula and NAIC Risk-Based Capital (RBC)

Report 3 of the CAS Risk-Based Capital (RBC) Research Working Parties

The purpose of this paper is to describe the main features of the Solvency II Standard Formula when applied to a property casualty insurer and compare those features of the Solvency II Standard Formula to the U.S. National Association of Insurance Commissioners Risk-Based Capital formula. The comparison helps clarify the assumptions and methods used by the U.S NAIC RBC and Solvency II Standard Formula. This is one of several papers being issued by the Risk-Based Capital (RBC) Dependencies and Calibration Working Party and the Underwriting Risk Working Party (collectively known as the RBC Working Parties).