Which of the following correctly lists the four RBC action levels and their ratio ranges?

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Multiple Choice

Which of the following correctly lists the four RBC action levels and their ratio ranges?

In the RBC framework, supervisory action depends on where an insurer’s RBC ratio falls among four bands, with each band signaling a progressively stronger level of regulator involvement. The correct sequence assigns Company Action Level to a ratio range of 150%–200%, Regulatory Action Level to 100%–150%, Authorized Control Level to 70%–100%, and Mandatory Control Level to less than 70%. This arrangement matches how higher percentages indicate stronger capital relative to requirements and thus less need for intervention, while lower percentages trigger increasingly direct supervisory actions. The other options mix up these ranges or reverse the levels (for example, placing higher ranges with more restrictive levels or listing the Mandatory Control Level as above 70%), which does not align with the standard RBC thresholds.

In the RBC framework, supervisory action depends on where an insurer’s RBC ratio falls among four bands, with each band signaling a progressively stronger level of regulator involvement. The correct sequence assigns Company Action Level to a ratio range of 150%–200%, Regulatory Action Level to 100%–150%, Authorized Control Level to 70%–100%, and Mandatory Control Level to less than 70%. This arrangement matches how higher percentages indicate stronger capital relative to requirements and thus less need for intervention, while lower percentages trigger increasingly direct supervisory actions.

The other options mix up these ranges or reverse the levels (for example, placing higher ranges with more restrictive levels or listing the Mandatory Control Level as above 70%), which does not align with the standard RBC thresholds.

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