Quote:
Originally Posted by scottie
Is that $2B backing dollar for dollar or a percentage of the total insured amount? And what's the life insurance "standard"? I've always wondered about that.
|
There is an actuarial field known as "Asset-Liability Management". It helps to determine if your asset profile sufficiently matches your liabilities. In the most basic of terms, it's a way of determining that the PV of Liabilities is always less than the PV of Assets, given any number of deterministic and stochastic interest rate and other economic scenarios.
It's not a dollar for dollar match.
Additionally, there is what is known as Risk Based Capital, which is the additional amount of assets needed on hand to protect the company against adverse insurance, investment or interest rate experience.
http://www.beneficialgroup.com/about/financial.html