capital
MinCapReq = 100% x BaseCap = CapReq / 1.5? is this correct? what is base capital?
CapReq is also called the Target Capital Required
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MinCapReq = 100% x BaseCap = CapReq / 1.5? is this correct? what is base capital?
CapReq is also called the Target Capital Required
Comments
Yes, that equation is correct. For others reading this, the equation can be derived from these two:
MinCapReq = BaseCap x 100%
SupCapReq = BaseCap x 150%
As for base capital, this terminology doesn't appear in the source and was moreso developed for the purpose of this wiki. The Base Capital is essentially the minimum capital required to cover specific insurer risks as defined by the OSFI Capital Guidelines. For P&C insurers, this is determined by the Minimum Capital Test (MCT) or the Mortgage Insurer Capital Adequacy Test (MICAT).