Solvency capital requirements for a Romanian non-life insurer under Solvency II and Risk-Based Capital frameworks

Abstract

The paper provides a theoretical assessment of the Solvency II and Risk Based Capital solvency regimes and a numerical evaluation based on the two important characteristics of the Risk Based Capital framework: accounting principles (book values) and risk parameters calibration (standard deviations for premium and reserve risk sub-module) following the Solvency II standard formula methodology for a Romanian non-life insurance company. The results of the numerical evaluation of two assumptions reveal a substantial impact in the overestimation/underestimation of the solvency capital requirements.

Keywords

• solvency capital requirements
• solvency ii
• risk-based capital
• non-life insurer
• insurance regulation