Risk-based capital requirements take into account differences in a particular insurers' underwriting and investment practices.

Question

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Risk-based capital requirements are designed to capture the varying levels of risk across different insurers based on their underwriting and investment practices. This approach ensures that insurers with riskier practices are required to hold higher levels of capital to protect policyholders in the event of unexpected losses.

Risk-Based Capital Requirements Take into Account Differences in a Particular