What is Capital Requirement?
Capital Requirement The minimum amount of capital an insurer must hold to meet regulatory standards and ensure solvency against policyholder risks, calculated per statutory formulae (e.g., Solvency II, RBC).
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Capital Requirement” Used in Practice?
Failure to meet capital requirements can result in regulatory intervention or license withdrawal.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Capital Requirement?
The minimum amount of capital an insurer must hold to meet regulatory standards and ensure solvency against policyholder risks, calculated per statutory formulae (e.g., Solvency II, RBC).
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