- The Catastrophe Risk (E) Subgroup of the Property and Casualty Risk-Based Capital (E) Working Group will 1) recalculate the premium risk factors on an ex-catastrophe basis, if needed; 2) continue to update the U.S. and non-U.S catastrophe event list; 3) continue to evaluate the need for exemption criteria for insurers with minimal risk; 4) evaluate the RBC results inclusive of a catastrophe risk charge first reported as of 2013; 5) develop instructions for the catastrophe risk charge; and 6) continue to evaluate any necessary refinements to the catastrophe risk charge.—Essential
Guidelines for Catastrophe Risk-Based Capital Reporting for the Year-End 2013 Property RBC Report
The Capital Adequacy (E) Task Force approved changes to the 2013 Property RBC report on November 30, 2012. The changes implement a Catastrophe Risk Formula for Informational Purposes Only into the 2013 RBC Formula. As a result of this, a charge for catastrophe risk (R6 and R7 hurricane and earthquake components) is required as part of the RBC calculation beginning in 2013 on an information only basis. Companies must report their catastrophe risk information in RBC report pages PR025, PR030, PR031, PR032, PR034 and PR100+.
This new page calculates the catastrophe risk charge for R6 (earthquake) and R7 (hurricane). This page includes an interrogatory to determine whether a company with hurricane and earthquake exposure must complete this form if they are part of an intercompany reinsurance arrangement that manages these risks. All other companies must complete this form for their hurricane and earthquake risk, as applicable.
R5A, R6 and R7 components were added to calculate the Authorized Control Level RBC inclusive of catastrophe risk.
The Trend Test Including Catastrophe Risk was added to determine if a company triggers regulatory attention at the Company Action Level when catastrophe risk is included in the formula.
A new column was added to compare the Total Adjusted Capital to the Company Action Level amount inclusive of catastrophe risk.
Pages PR034 and 100+:
Both U.S and non-U.S. catastrophe losses by annual statement Schedule P line of business must be provided. If the line of business has incurred U.S. catastrophe losses arising from events either included on the list of U.S. catastrophe events approved by the Catastrophe Risk Subgroup as available on the NAIC’s website or numbered and labeled by PCS as a hurricane, tropical storm, or earthquake, provide the data required in columns (24A) and (28A). If this line of business has incurred non-U.S. catastrophe losses arising from a hurricane, tropical storm, or earthquake from an event included on the list of non-U.S. catastrophe events approved by the Catastrophe Risk Subgroup as available on the NAIC’s website, provide the data in columns (24B) and (28B).
Please refer to the Frequently Asked Questions for more information.