Standard & Poor’s has published an article that explains the various
criteria changes it has made to its U.S. property/casualty insurance
risk-based capital model.
The changes include a deduction of goodwill from the calculation of total adjusted capital, tax adjustment to the statutory loss and loss adjustment expense reserve deficiency (if any) of the insurer or reinsurer, adjustments to C-4 (reserve) risk charges, revisions to C-5 (guaranty fund assessment) risk charges, and future adjustments to C-1 (asset) risk charges. “All the changes except C-1 (asset) risk charges will be included in the 2002 valuation year, while the C-1 adjustments will be enforced in the 2003 valuation year to
reflect the new economic environment,” noted Standard & Poor’s credit analyst Siddhartha Ghosh.
The article, which is titled “Various Changes to U.S. Risk-Based
Property/Casualty Insurance Capital Model,” can be found on RatingsDirect, Standard & Poor’s Web-based credit analysis system. The article can also be found on Standard & Poor’s Web site at www.standardandpoors.com. Under Fixed Income, select Credit Ratings Criteria.
Standard & Poor’s will host its annual seminar outlining the
industry’s current challenges and future prospects on June 1-3, at the Grand Hyatt in New York City. For more information and to register online, go to http://www.events.standardandpoors.com/insurance.
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