Virginia Code 38.2-5502: RBC Reports
A. Every domestic licensee shall, on or prior to each March 1, the “filing date,” prepare and submit to the Commission a report of its RBC Levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC Instructions. In addition, every domestic licensee shall file its RBC Report:
Terms Used In Virginia Code 38.2-5502
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- business of insurance: include solicitation, negotiations preliminary to execution, execution of an insurance contract, and the transaction of matters subsequent to execution of the contract and arising out of it. See Virginia Code 38.2-100
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Domestic licensee: means and includes a domestic insurer and a domestic health organization. See Virginia Code 38.2-5501
- Health organization: means an insurer that is required by the Commission to use the NAIC's Health Annual Statement blank when filing the annual statement prescribed by § 38. See Virginia Code 38.2-5501
- in writing: include any representation of words, letters, symbols, numbers, or figures, whether (i) printed or inscribed on a tangible medium or (ii) stored in an electronic or other medium and retrievable in a perceivable form and whether an electronic signature authorized by Chapter 42. See Virginia Code 1-257
- Insurer: means an insurance company. See Virginia Code 38.2-100
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Licensee: means and includes a life and health insurer, a property and casualty insurer, and a health organization. See Virginia Code 38.2-5501
- Life and health insurer: means any domestic insurer or foreign insurer, whether known as a life insurer or a property and casualty insurer or a reciprocal or a fraternal benefit society, which is authorized to write any class of life insurance, annuities, or accident and sickness insurance, and is not writing a class of insurance set forth in §§ 38. See Virginia Code 38.2-5501
- NAIC: means the National Association of Insurance Commissioners. See Virginia Code 38.2-5501
- Property and casualty insurer: means any domestic insurer or foreign insurer which is authorized under any chapter of this title to write any class of insurance except a class of life insurance or annuities, provided that "property and casualty insurer" shall not include monoline mortgage guaranty insurers, financial guaranty insurers and title insurers, nor shall it include any insurer which is required by the Commission to use the NAIC's Health Annual Statement blank when filing the annual statement prescribed by § 38. See Virginia Code 38.2-5501
- RBC: means risk-based capital. See Virginia Code 38.2-5501
- RBC Instructions: means the RBC Report including risk-based capital instructions adopted by the NAIC, as such RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. See Virginia Code 38.2-5501
- RBC Report: means the report required in § 38. See Virginia Code 38.2-5501
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
1. With the NAIC in accordance with the RBC Instructions; and
2. With the insurance commissioner in any state in which the licensee is authorized to do business, if the insurance commissioner has notified the licensee of its request in writing, in which case, the licensee shall file its RBC Report not later than the later of:
a. Fifteen days from the receipt of notice to file its RBC Report with that state; or
b. The filing date.
B. A life and health insurer‘s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may adjust for the covariance between, the following risks:
1. The risk with respect to the insurer‘s assets;
2. The risk of adverse insurance experience with respect to the insurer’s liabilities and obligations;
3. The interest rate risk with respect to the insurer’s business; and
4. All other business risks and such other relevant risks as are set forth in the RBC Instructions.
Each risk shall be determined in each case by applying the factors in the manner set forth in the RBC Instructions.
C. A property and casualty insurer‘s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may adjust for the covariance between, the following risks:
1. Asset risk;
2. Credit risk;
3. Underwriting risk; and
4. All other business risks and such other relevant risks as are set forth in the RBC Instructions.
Each risk shall be determined in each case by applying the factors in the manner set forth in the RBC Instructions.
D. A health organization‘s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may adjust for the covariance between, the following risks:
1. Asset risk;
2. Credit risk;
3. Underwriting risk; and
4. All other business risks and such other relevant risks as are set forth in the RBC Instructions.
Each risk shall be determined in each case by applying the factors in the manner set forth in the RBC Instructions.
E. An excess of capital over the amount produced by the risk-based capital requirements contained in this Act and the formulas, schedules and instructions referred to in this Act is desirable in the business of insurance. Accordingly, licensees should seek to maintain capital above the RBC levels required by this Act. Additional capital is used and useful in the insurance business and helps to secure a licensee against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this Act.
F. If a domestic licensee files an RBC Report which in the judgment of the Commission is inaccurate, then the Commission shall adjust the RBC Report to correct the inaccuracy and shall notify the licensee of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC Report as so adjusted is referred to as an “Adjusted RBC Report.”