Difference between revisions of "Expanded R0 Formula for Market Method"
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:: A = min[ affiliate RBC x (<span style="color: green;">'''ownership%'''</span> of common stock) , (statutory surplus of affiliate) x (<span style="color: green;">'''ownership%'''</span> of common stock) | :: A = min[ affiliate RBC x (<span style="color: green;">'''ownership%'''</span> of common stock) , (statutory surplus of affiliate) x (<span style="color: green;">'''ownership%'''</span> of common stock) | ||
* If (affiliate RBC) x <span style="color: green;">'''ownership%'''</span> of common stock > (value of common stock as recorded by reporting entity) <u>then</u> | * If (affiliate RBC) x <span style="color: green;">'''ownership%'''</span> of common stock > (value of common stock as recorded by reporting entity) <u>then</u> | ||
| − | :: B = (value of common stock as recorded by reporting entity) - A | + | :: B = (value of common stock as recorded by reporting entity) - A ''(cannot be less than 0)'' |
* Otherwise calculate B like this: | * Otherwise calculate B like this: | ||
:: B = MAX[ (value of common stock as recorded by reporting entity) - 22.5% x (pro-rata statutory surplus of affiliate), | :: B = MAX[ (value of common stock as recorded by reporting entity) - 22.5% x (pro-rata statutory surplus of affiliate), | ||
| − | :: (affiliate RBC) x (<span style="color: green;">'''ownership%'''</span> of common stock ) - A | + | :: (affiliate RBC) x (<span style="color: green;">'''ownership%'''</span> of common stock ) - A ''(cannot be less than 0)'' |
|} | |} | ||
Revision as of 22:31, 24 April 2022
I do not believe you would be required to memorize this. There are too many other important RBC topics. It's possible you'd be asked to calculate R0 for a simple case and the examples on the main RBC page are representative of that.
R0 (common stocks) using market method = A + B - where
- A = min[ affiliate RBC x (ownership% of common stock) , (statutory surplus of affiliate) x (ownership% of common stock)
- If (affiliate RBC) x ownership% of common stock > (value of common stock as recorded by reporting entity) then
- B = (value of common stock as recorded by reporting entity) - A (cannot be less than 0)
- Otherwise calculate B like this:
- B = MAX[ (value of common stock as recorded by reporting entity) - 22.5% x (pro-rata statutory surplus of affiliate),
- (affiliate RBC) x (ownership% of common stock ) - A (cannot be less than 0)
