40-2d03. Determination of risk-based capital. (a) 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:
(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; determined in each case by applying the factors in the manner set forth in the RBC instructions.
(b) An excess of capital over the amount produced by the risk-based capital requirements contained in this act and the formulas, schedules and instructions referenced in this act is desirable in the business of insurance. Accordingly, each health organization 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 health organization 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.
History: L. 2000, ch. 147, ยง 4; July 1.
Structure Kansas Statutes
Article 2d - Health Organization Risk-based Capital Requirements
40-2d01 Risk-based capital requirements; definitions.
40-2d02 Risk-based capital report.
40-2d03 Determination of risk-based capital.
40-2d04 Risk-based capital report; adjustment.
40-2d05 Company action level event; defined.
40-2d06 Submission of RBC plan.
40-2d07 Risk-based capital plan; submission.
40-2d08 Same; notification by commissioner.
40-2d09 Same; notification of a regulatory action event.
40-2d10 Domestic health organization to file RBC plan in any state authorized to do business.
40-2d11 Regulatory action level event.
40-2d12 Same; commissioner's duties in regulatory action level event.
40-2d13 Corrective actions; submission of RBC plans, when.
40-2d14 Review of RBC plans; expenses.
40-2d15 Authorized control level event; defined.
40-2d16 Same; commissioner's duties in authorized control level event.
40-2d17 Mandatory control event; defined.
40-2d18 Same; commissioner's actions.
40-2d19 Hearing under Kansas administrative procedure act.
40-2d20 RBC reports, plans and corrective orders are confidential; not to be used for rate making.
40-2d22 Provisions of act supplemental to other provisions of law.
40-2d23 Foreign health organization; RBC report.
40-2d24 Commissioner may require foreign health insurer to file RBC plan, when.
40-2d25 Mandatory control level event; foreign health organization; liquidation of property.
40-2d26 Notices by commissioner; effective, when.
40-2d28 Regulatory action provisions; phase in.
40-2d29 Rules and regulations.
40-2d30 Health organization risk-based capital act; citation.