Fewer than 3 percent of life insurers dealt with regulatory action in 2009 as a result of low risk-based capital levels, according to a new report by the National Association of Insurance Commissioners.
The percentage of life insurers with RBC levels triggering regulatory action fell to 2.32 percent in 2009 from 2.83 percent in 2008.
In 2006, the percentage of life insurers with RBS levels low enough to trigger regulatory action was just 1.3 percent and 1.49 percent in 2007.
The RBC system is used by state regulators to determine whether insurers have enough capital to fulfill obligations to policyholders. The system provides insurers with more credit for assets held in what appear to be safer investments that for those held in riskier investments.
Insurance risk accounts for 51 percent of total RBC at insurers with $10 million to $25 million in total admitted assets, and just 15 percent of RBC at those with more than $10 billion in assets, NAIC said.