Expanded R0 Formula for Market Method
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R0 (common stocks) using equity method = min[ affiliate RBC x (ownership% of common stock) , value of common stock as recorded by reporting entity ] 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
- 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
