Which asset category uses a different RBC factor of 0.01?

• A. Investment income due & accrued
• B. Net admitted value
• C. Reinsurance recoverables
• D. Non-invested assets

Answer: (A)

In RBC frameworks, each asset category carries a risk-based factor to reflect credit and liquidity risk, and total asset risk is the sum of asset amounts times these factors. Investment income due & accrued represents short-term, readily collectible interest and dividends that have been earned but not yet paid. Because these are highly liquid and carry minimal credit risk, they get a very small weight, 0.01, in the asset risk calculation. This keeps their impact on the overall RBC low. Other asset categories like net admitted value, reinsurance recoverables, and non-invested assets involve higher credit or liquidity risk and thus receive larger factors, increasing their contribution to asset risk.