As with our capital requirements for bank holding companies, the CA would categorize all of the consolidated insurance group's assets and insurance liabilities into risk segments, apply risk factors to the amounts in each segment, and then set a minimum ratio of required capital comparing the consolidated capital requirements to the group's consolidated capital resources.
However, the CA would use risk weights or risk factors that are more appropriate for the longer-term nature of most insurance liabilities. Like the BCR of the IAIS, the CA would take a consolidated approach to capital requirements. However, unlike the BCR, the foundation of the CA would be consolidated financial information based on U.S. GAAP, with appropriate adjustments for regulatory purposes.