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FO
RE
CA
STIN
G
RBCRisk-Based Capital
201&
INST
RU
CT
ION
S
Risk-Based Capital Forecasting & Instructions
Health
2017
The NAIC is the authoritative source for insurance industry information. Our expert solutions support the efforts of regulators, insurers and researchers by providing detailed and comprehensive insurance information. The NAIC offers a wide range of publications in the following categories:
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ISBN: 978-1-945655-21-0
Printed in the United States of America
No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any storage or retrieval system, without written permission from the NAIC.
NAIC Executive Office444 North Capitol Street, NWSuite 700Washington, DC 20001202.471.3990
NAIC Central Office1100 Walnut StreetSuite 1500Kansas City, MO 64106816.842.3600
NAIC Capital Markets& Investment Analysis OfficeOne New York Plaza, Suite 4210New York, NY 10004212.398.9000
NAIC Health Risk Based CapitalNewsle erAugust 2017Volume 19.1
What RBC Pages Should Be Submitted? For the year-end 2017 health risk-based capital (RBC) filing, submit hard copies of pages XR001 through XR027 to any state that requests a hard copy in addition to the electronic filing. Beginning with year-end 2007, a hard copy of the RBC filings was not required to be submitted to the NAIC. Other pages, such as the capita-tions worksheet, do not need to be submitted. Those pages would need to be retained by the company as docu-mentation.
Business Risk—Excessive Growth Charge For Start-Up Companies As a result of the adoption of agenda item 2014-28-H(MOD) by the Capital Adequacy (E) Task Force at the 2016 Fall National Meeting, new footnotes were added to page XR021 for the use of projected amounts in prior year Line (13) and Line (15), along with an explanation of the projections used.
Money Market Mutual Funds As a result of the reclassification of money market mutual funds (MMMFs) to cash equivalents by the Statutory Accounting Principles (E) Working Group, the Capital Adequacy (E) Task Force adopted agenda item 2016-15-CA at the Spring National Meeting. MMMFs will be isolated on their own line under the Miscellaneous Fixed Income Assets section on page XR007 and subtracted from the cash equivalents. The Annual Statement Source will be Schedule E, Part 2, Column 7, Line 8599999.
Operational Risk As a result of a technical issue that was presented during the June 28 Capital Adequacy (E) Task Force conference call, implementation of a risk factor for Operational Risk has been deferred for at least a year. The Task Force adopted agenda item 2016-13-O at the Spring National Meeting and modified it on its June 28 conference call. At the Spring National Meeting, the Task Force in essence voted to “go live” for 2017 reporting by adopting the structural change to remove the basic operational risk options from the informa-tional-only page, but retain the growth risk portion in the informational-only page, and move the “add-on” approach for basic operational risk to Page XR025. On its June 28 conference call, the Task Force adopted the operational risk instructions for pages XR002, XR022 and XR024-XR025, but voted to reduce the recommended RBC charge from 1.5% to 0% for 2017 to allow the Operational Risk (E) Subgroup to address the technical concerns raised.
Supplemental Benefits within Stand-Alone Medicare Part D Coverage As a result of the adoption of agenda item 2016-16-CA by the Capital Adequacy (E) Task Force at the Spring National Meeting, the factor for Supplemental Benefits within Stand-Alone Medicare Part D Coverage (Page XR014, Line (22.1)) was increased to 0.500 and will be applied to claims incurred.
Stop LossAs a result of the adoption of agenda item 2016-17-CA by the Capital Adequacy (E) Task Force at the Spring National Meeting, a tiered factor approach will be applied to stop loss premiums. A footnote was added to page XR014, Line (22) to apply a factor of 0.350 to the first $25,000,000 in stop loss premium and a factor of 0.250 would be applied to premium in excess of $25,000,000.
Unaffiliated Common Stock Money Market Mutual Funds As a result of the adoption of agenda item 2017-06-CA, by the Capital Adequacy (E) Task Force on its June 28 confer-ence call, the annual statement reference was modified to Schedule E, Part 2, Column 7, Line 8699999 and the factor was modified to 0% on Line (17) on page XR009. The purpose of the modification was to avoid the double count-ing of MMMFs in both cash equivalents and common stock. The instructions were also revised to reflect the change.
In This Issue:What RBC Pages to Submit .......................................... 1Business Risk-Excessive Growth Charge For Start-Up
Companies ................................................................ 1 Money Market Mutual Funds ........................................ 1 Operational Risk ............................................................ 1 Supplemental Benefits Within Stand-Alone Medicare
Part D Coverage ....................................................... 1 Stop Loss ....................................................................... 1 Unaffiliated Common Stock Money Market Mutual
Funds ....................................................................... 1 Editorial Changes .......................................................... 2
Health Risk-Based Capital Newsletter Page 2
Editorial Changes
1. On page XR002, the column name was updated in Column 4 to reflect the changes to page XR025, page PR032 and page LR031 for Operational Risk. The column name was changed to “Affiliate’s RBC After Covariance Before Operational Risk” and the line number for life was changed to Line (67) + (70) and the line number for P&C was changed to (73).
2. On page XR022, the references to P&C Supp. Sch. F, Pt1, C5, L0899999 and P&C Supp. Sch. F, Pt1, C5, L0999999 were removed from the Reference column for Line (2), Line (3), Line (6) and Line (7) as a result of Proposal 2017-01BWG, adopted by the Blanks (E) Working Group on its June 14 conference call.
3. The column reference in the instructions for Line (18) on page XR023 was corrected from “Column (2)” to “Column (3).”
4. The annual statement reference was updated from Note 5I to Note 5M on Line (23) and (24) on page XR007 as a result of proposal 2017-13BWG (MOD), adopted by the Blanks (E) Working Group on its June 14 conference call.
5. The annual statement reference was updated to Schedule E, Part 2, Column 7, Line 8699999 on Line (17) on page XR009.
© 2017 National Association of Insurance Commissioners
Health Risk-Based Capital Newsletter Volume 19.1. Published annually or whenever needed by the NAIC for insurance regulators, professionals and consumers.
Direct correspondence to: Crystal Brown, RBC News-letters, NAIC, 1100 Walnut Street, Suite 1500, Kansas City, MO 64106-2197. Phone: (816) 783-8146. Email: [email protected] corrections requested. Please mail the old address label with the correction to: NAIC Publications Department, 1100 Walnut Street, Suite 1500, Kansas City, MO 64106-2197. Phone: (816) 783-8300. Email: [email protected].
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
10
/20/
2017
2017
NA
IC H
ealth
Ris
k-B
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Cap
ital R
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Incl
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Fore
cast
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and
Inst
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for
Com
pani
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of D
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31, 2
017
Con
fiden
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whe
n C
ompl
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NAI
CN
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Insu
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s
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
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Com
mis
sion
ers
10
/20/
2017
© C
opyr
ight
NA
IC 1
998-
2017
by
Nat
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l Ass
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tion
of In
sura
nce
Com
mis
sion
ers
All
right
s res
erve
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Nat
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tion
of In
sura
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mis
sion
ers
Publ
icat
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Dep
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(816
) 783
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© 1
998-
2017
Nat
iona
l Ass
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tion
of In
sura
nce
Com
mis
sion
ers
10
/20/
2017
TA
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t 1 A
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Fi
xed
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me
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XR
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... 8
Rep
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(Syn
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sset
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nsac
tions
and
Man
dato
ry C
onve
rtibl
e Se
curit
ies –
XR
008
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. 10
Equi
ty A
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Ass
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ntra
tion
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or In
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(42)
– X
R01
4–X
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6 ....
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.. 25
Und
erw
ritin
g R
isk
– M
anag
ed C
are
Cre
dit –
XR
017
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... 27
Cre
dit R
isk
– X
R01
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Bus
ines
s Ris
k –
XR
021 .
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34
Gro
wth
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ratio
nal R
isk
Info
rmat
iona
l Sec
tion
Inst
ruct
ions
– X
R02
2 (F
or In
form
atio
nal P
urpo
ses O
nly)
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.. 36
Fede
ral A
CA
Ris
k A
djus
tmen
t and
Ris
k C
orrid
or S
ensi
tivity
Tes
t – X
R02
3....
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latio
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XR
024–
XR
025
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Tota
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R02
6 ...
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.. 39
Com
paris
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f Tot
al A
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ed C
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R02
7 ...
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. 39
Tren
d Te
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. 40
App
endi
x 1
– C
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rms .
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App
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... X
R00
6
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
10
/20/
2017
Fixe
d In
com
e A
sset
s.....
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XR
007
Rep
licat
ion
(Syn
thet
ic A
sset
) Tra
nsac
tions
and
Man
dato
ry C
onve
rtibl
e Se
curit
ies .
......
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.. X
R00
8 Eq
uity
Ass
ets .
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.. X
R00
9 Pr
oper
ty &
Equ
ipm
ent A
sset
s ....
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... X
R01
0 A
sset
Con
cent
ratio
n....
......
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. XR
011
Und
erw
ritin
g R
isk
– Ex
perie
nce
Fluc
tuat
ion
Ris
k ....
......
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......
.. X
R01
2 U
nder
writ
ing
Ris
k –
Expe
rienc
e Fl
uctu
atio
n R
isk
– (F
or In
form
atio
nal P
urpo
ses O
nly)
.....
......
......
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... X
R01
2-A
A
nnua
l Sta
tem
ent S
ourc
e ....
......
......
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.... X
R01
3 A
nnua
l Sta
tem
ent S
ourc
e ....
......
......
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......
XR
013-
A
Oth
er U
nder
writ
ing
Ris
k / D
isab
ility
Inco
me
Prem
ium
......
......
......
......
......
......
......
......
......
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.... X
R01
4 Lo
ng-T
erm
Car
e (L
TC) I
nsur
ance
Pre
miu
m /
His
toric
al L
oss R
atio
Exp
erie
nce .
......
......
......
......
......
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......
......
......
......
......
......
......
......
......
......
XR
015
Lim
ited
Ben
efit
Plan
s (In
divi
dual
and
Gro
up C
ombi
ned)
.....
......
......
......
......
......
......
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......
......
. XR
016
Und
erw
ritin
g R
isk
– M
anag
ed C
are
Cre
dit C
alcu
latio
ns ...
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
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......
......
......
......
......
......
......
.....
XR
017
Cal
cula
tion
of C
ateg
ory
2 M
anag
ed C
are
Fact
or ...
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
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......
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......
......
......
.....
XR
018
Cre
dit R
isk
– R
eins
uran
ce C
eded
/ C
apita
tions
to In
term
edia
ries .
......
......
......
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......
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......
.....
XR
019
Oth
er R
ecei
vabl
es ...
......
......
......
......
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......
......
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......
......
......
......
......
.....
XR
020
Bus
ines
s Ris
k ...
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
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......
......
......
......
......
......
.....
XR
021
Gro
wth
Ope
ratio
nal R
isk
– In
form
atio
nal O
nly .
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
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......
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......
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......
......
.. X
R02
2 Fe
dera
l AC
A R
isk
Adj
ustm
ent a
nd R
isk
Cor
ridor
Sen
sitiv
ity T
est ..
......
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......
.. X
R02
3 C
alcu
latio
n of
Tot
al R
isk-
Bas
ed C
apita
l Afte
r Cov
aria
nce
......
......
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......
.... X
R02
4 C
alcu
latio
n of
Tot
al A
djus
ted
Cap
ital ..
......
......
......
......
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......
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......
......
.....
XR
026
Com
paris
on o
f Tot
al A
djus
ted
Cap
ital t
o R
isk-
Bas
ed C
apita
l .....
......
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. XR
027
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
i 10
/20/
2017
NA
IC H
ealth
Ris
k-B
ased
Cap
ital R
epor
t
INT
RO
DU
CT
ION
Ris
k-ba
sed
capi
tal
(RB
C)
is a
met
hod
of m
easu
ring
the
min
imum
am
ount
of
capi
tal
appr
opria
te f
or a
rep
ortin
g en
tity
to s
uppo
rt its
ove
rall
busi
ness
ope
ratio
ns i
n co
nsid
erat
ion
of it
s si
ze a
nd r
isk
prof
ile. I
t pro
vide
s an
ela
stic
mea
ns o
f se
tting
the
capi
tal r
equi
rem
ent i
n w
hich
the
degr
ee o
f ris
k ta
ken
by th
e in
sure
r is
the
prim
ary
dete
rmin
ant.
The
five
maj
or c
ateg
orie
s of r
isks
invo
lved
are
:
A
sset
Ris
k –
Aff
iliat
es
H–0
Th
is is
the
risk
of a
sset
s’ d
efau
lt fo
r cer
tain
aff
iliat
ed
inve
stm
ents
.
A
sset
Ris
k –
Oth
er
H–1
Th
is is
the
risk
of a
sset
s’ d
efau
lt of
prin
cipa
l and
inte
rest
or
fluct
uatio
n in
mar
ket v
alue
.
U
nder
writ
ing
Ris
k
H–2
Th
is is
the
risk
of u
nder
estim
atin
g lia
bilit
ies f
rom
bus
ines
s
alre
ady
writ
ten
or in
adeq
uate
ly p
ricin
g bu
sine
ss to
be
writ
ten
in
th
e co
min
g ye
ar.
C
redi
t Ris
k
H–3
Th
is is
the
risk
of re
cove
ring
rece
ivab
le a
mou
nts f
rom
cre
dito
rs.
B
usin
ess R
isk
H
–4
This
is th
e ris
k of
gen
eral
bus
ines
s.
A c
ompa
ny’s
risk
-bas
ed c
apita
l is
calc
ulat
ed b
y ap
plyi
ng fa
ctor
s to
var
ious
ass
et, p
rem
ium
and
rese
rve
item
s. Th
e fa
ctor
is h
ighe
r for
thos
e ite
ms
with
gre
ater
und
erly
ing
risk
and
low
er f
or le
ss r
isky
item
s. Th
e ad
equa
cy o
f a
com
pany
’s a
ctua
l cap
ital c
an th
en b
e m
easu
red
by a
com
paris
on to
its
risk-
base
d ca
pita
l as
dete
rmin
ed b
y th
e fo
rmul
a.
Ris
k-ba
sed
capi
tal s
tand
ards
will
be
used
by
regu
lato
rs to
set
in m
otio
n ap
prop
riate
regu
lato
ry a
ctio
ns re
latin
g to
insu
rers
that
sho
w in
dica
tions
of w
eak
or d
eter
iora
ting
cond
ition
s. It
also
pro
vide
s an
addi
tiona
l sta
ndar
d fo
r min
imum
cap
ital r
equi
rem
ents
that
com
pani
es sh
ould
mee
t to
avoi
d be
ing
plac
ed in
reha
bilit
atio
n or
liqu
idat
ion.
PUR
POSE
OF
TH
IS R
EPO
RT
Th
is re
port
pres
ents
the
NA
IC H
ealth
Ris
k-B
ased
Cap
ital f
orm
ula
in a
n in
stru
ctio
nal f
orm
at th
at sh
ould
be
help
ful t
o an
yone
resp
onsi
ble
for s
ubm
ittin
g da
ta. T
his f
orm
ula
is a
n ex
trem
ely
impo
rtant
tool
for r
egul
ator
s. D
eter
min
ing
accu
rate
and
tim
ely
data
is a
n im
porta
nt p
art o
f thi
s pr
oces
s. Th
is is
mos
t lik
ely
to o
ccur
whe
n ev
eryo
ne, f
rom
th
e co
mpa
ny C
EO to
the
indi
vidu
al p
repa
ring
the
data
, has
a b
asic
und
erst
andi
ng o
f the
form
ula.
Whi
le th
is re
port
prov
ides
this
unde
rsta
ndin
g in
a c
onci
se p
acka
ge, i
t is
stro
ngly
reco
mm
ende
d th
at th
e pe
rson
or p
erso
ns c
ompi
ling
and
ente
ring
the
info
rmat
ion
be s
enio
r com
pany
off
icia
ls w
ith a
goo
d un
ders
tand
ing
of th
e fin
anci
al a
spec
ts
of h
ealth
bus
ines
s. It
is a
lso
reco
mm
ende
d th
at c
ompa
nies
see
k th
e as
sist
ance
of
thei
r in
depe
nden
t ac
coun
tant
s an
d/or
act
uarie
s w
hen
prep
arin
g th
is r
epor
t. Pl
ease
co
mpl
ete
the
Jura
t sig
natu
re r
equi
rem
ents
in a
ccor
danc
e w
ith th
e re
quire
men
ts o
f th
e do
mic
iliar
y st
ate.
Dire
ct a
ny q
uest
ions
con
cern
ing
sign
atur
e re
quire
men
ts to
that
st
ate.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
ii10
/20/
2017
WH
AT
’S IN
TH
E R
EPO
RT
C
erta
in te
rms r
elat
ing
to ri
sk-b
ased
cap
ital u
sed
in th
is re
port
are
defin
ed in
the
NA
IC R
isk-B
ased
Cap
ital (
RBC
) for
Hea
lth O
rgan
izat
ions
Mod
el A
ct (#
315)
.
Gen
eral
ly, e
ach
narr
ativ
e pa
ge d
iscu
sses
a d
iffer
ent s
egm
ent o
f eac
h ris
k cl
assi
ficat
ion
(i.e.
, the
re is
a n
arra
tive
for B
onds
, Mor
tgag
es, P
refe
rred
and
Com
mon
Sto
cks,
etc.
w
ithin
the
Ass
et R
isk
sect
ion)
. The
form
ula
is p
rese
nted
in w
orks
heet
form
follo
win
g th
e na
rrat
ive
sect
ion.
Mos
t na
rrat
ive
page
s ha
ve a
brie
f ba
ckgr
ound
sum
mar
y of
the
dev
elop
men
t of
the
fac
tors
cal
led
the
“Bas
is o
f th
e Fa
ctor
s.” D
evel
opm
ent
of c
erta
in f
acto
rs r
equi
re
soph
istic
ated
mod
elin
g te
chni
ques
but
the
basi
c co
ncep
ts a
re n
ot c
ompl
icat
ed.
Man
y of
the
sect
ions
hav
e a
narr
ativ
e pa
ge o
n “S
peci
fic In
stru
ctio
ns fo
r App
licat
ion
of th
e Fo
rmul
a.”
This
sec
tion
shou
ld s
erve
as
a gu
idel
ine
for t
hose
who
ass
embl
e th
e da
ta o
r ana
lyze
the
resu
lts. I
t inc
lude
s de
finiti
ons
and
expl
anat
ions
for s
peci
fic it
ems
that
sho
uld
be c
alcu
late
d, c
larif
icat
ion
on s
truct
ural
inte
nt o
f cer
tain
sec
tions
of t
he
form
ula,
and
inst
ruct
ions
on
reco
ncili
atio
n of
cer
tain
tota
ls.
Ann
ual s
tate
men
t sou
rces
refe
rred
to in
this
repo
rt do
not
use
par
enth
eses
, i.e
., a
refe
renc
e to
the
curr
ent y
ear’
s tot
al A
dmin
istra
tive
Expe
nses
on
the
inco
me
stat
emen
t will
re
ad “
Page
4, C
ol 2
, Lin
e 21
.” A
nnua
l sta
tem
ent r
efer
ence
s w
ill b
egin
with
a p
age
num
ber o
nly
for P
ages
2, 3
, 4 a
nd 7
. Oth
erw
ise,
the
refe
renc
e w
ill b
e a
sche
dule
lette
r (e
.g.,
Sche
dule
D o
r Sch
D) o
r a n
ame
of a
n ex
hibi
t or s
ched
ule
(e.g
., U
nder
writ
ing
and
Inve
stm
ent E
xhib
it or
UI)
.
Ris
k-ba
sed
capi
tal r
efer
ence
s in
this
repo
rt w
ill u
se p
aren
thes
es a
roun
d th
e lin
e an
d co
lum
n nu
mbe
r. Fo
r exa
mpl
e, a
refe
renc
e to
XR
007
– Fi
xed
Inco
me
Ass
ets
– B
onds
, C
olum
n 2,
Lin
e 9
in th
is re
port
will
read
, “B
onds
, Col
(2),
Line
(9).”
Neg
ativ
e va
lues
can
som
etim
es a
ppea
r in
the
valu
e co
lum
n or
RB
C S
ubto
tal c
olum
n of
this
rep
ort.
Thes
e ne
gativ
e va
lues
are
ret
aine
d to
fac
ilita
te c
ross
chec
king
of
amou
nts
repo
rted
in th
e an
nual
sta
tem
ent a
gain
st a
mou
nts
repo
rted
in th
e R
BC
filin
g. H
owev
er, w
hen
a ne
gativ
e nu
mbe
r app
ears
in th
e va
lue
colu
mn,
that
val
ue w
ill b
e co
nver
ted
to z
ero
befo
re d
eter
min
ing
the
RB
C R
equi
rem
ent.
For e
xam
ple,
a n
egat
ive
$10,
000
for c
ash
[XR
007,
Col
(1),
Line
(10)
] will
pro
duce
a z
ero
($0
times
0.0
03) i
n C
olum
n (2
), R
BC
Req
uire
men
t, ra
ther
than
a n
egat
ive
$30
(-$1
0,00
0 tim
es 0
.003
).
MA
NA
GE
ME
NT
’S D
ISC
USS
ION
AN
D A
NA
LY
SIS
Each
com
pany
has
the
oppo
rtuni
ty to
pre
pare
a w
ritte
n an
alys
is o
f the
ir co
mpa
ny’s
risk
-bas
ed c
apita
l res
ults
. Thi
s an
alys
is is
not
a re
quire
men
t. A
com
pany
may
exp
lain
sp
ecia
l situ
atio
ns a
s it
deem
s ne
cess
ary.
Com
pani
es s
houl
d al
so g
ive
expl
anat
ions
whe
re li
ne it
ems
do n
ot re
conc
ile w
ith a
mou
nts r
efer
ence
d to
ann
ual s
tate
men
t sou
rces
. H
owev
er, m
odifi
catio
n of
the
risk-
base
d ca
pita
l for
mul
a is
not
acc
epta
ble.
Fac
tors
, RB
C A
mou
nts t
hat g
o to
the
Cal
cula
tion
of T
otal
Ris
k-B
ased
Cap
ital A
fter C
ovar
ianc
e pa
ge (H
0, H
1, H
2, H
3, H
4) a
nd th
e To
tal A
djus
ted
Cap
ital A
mou
nt s
houl
d no
t be
over
writ
ten.
Thi
s w
ritte
n an
alys
is s
houl
d no
t be
cons
trued
as
the
“RB
C P
lan”
requ
ired
in th
e N
AIC
Ris
k-Ba
sed
Cap
ital (
RBC
) for
Hea
lth O
rgan
izat
ions
Mod
el A
ct (#
315)
.
APP
LIC
AB
ILIT
Y O
F N
AIC
HE
AL
TH
RB
C R
EPO
RT
Th
e N
AIC
Hea
lth R
BC
Rep
ort h
as b
een
deve
lope
d fo
r com
pani
es w
ho fi
le th
e N
AIC
Hea
lth a
nnua
l sta
tem
ent “
oran
ge b
lank
.”
CH
AN
GE
S T
O T
HE
FO
RM
UL
A
Cha
nges
to th
e fo
rmul
a m
ay b
e m
ade
by a
nnua
l sta
tem
ent p
rese
ntat
ion,
acc
ount
ing
proc
edur
es a
nd re
finem
ent o
f the
form
ula.
All
such
cha
nges
will
be
dete
rmin
ed b
y th
e N
AIC
Cap
ital A
dequ
acy
(E) T
ask
Forc
e.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
iii10
/20/
2017
HO
W T
O S
UB
MIT
DA
TA
Pr
inte
d R
BC
rep
orts
and
ele
ctro
nic
subm
issi
ons
shou
ld b
e su
bmitt
ed a
s sp
ecifi
ed in
the
indi
vidu
al s
tate
fili
ng c
heck
lists
. The
ele
ctro
nic
subm
issi
on is
due
Mar
ch 1
.Th
ere
may
be
plac
es w
here
the
scre
en d
ispl
ay o
f the
RB
C p
rogr
am a
nd th
epr
into
ut fo
rmat
var
y sl
ight
ly fr
om th
e bo
okle
t. In
thos
e in
stan
ces,
the
book
let s
houl
d ex
plai
n th
e di
ffer
ence
s; h
owev
er, t
he o
vera
ll ca
lcul
atio
n w
ill b
e th
e sa
me.
WO
RK
PAPE
RS
Wor
kpap
ers
need
ed to
pre
pare
this
repo
rt sh
ould
be
reta
ined
and
ava
ilabl
e fo
r exa
min
atio
n in
acc
orda
nce
with
reco
rd re
tent
ion
requ
irem
ents
of t
he d
omes
tic s
tate
law
s or
re
gula
tions
.
QU
EST
ION
S C
onta
ct C
ryst
al B
row
nat
816
-783
-814
6 or
cbr
own@
naic
.org
for R
BC
form
ula
ques
tions
. The
NA
IC F
inan
cial
Rep
ortin
g Q
uest
ions
Hel
p Li
ne c
an a
lso
be c
onta
cted
at
816-
783-
8400
for f
orm
ula
and
repo
rting
que
stio
ns.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
1 10
/20/
2017
AFF
ILIA
TE
D S
TO
CK
S X
R00
2–X
R00
4
This
par
t of t
he fo
rmul
a on
ly n
eeds
to b
e co
mpl
eted
if th
e re
porti
ng e
ntity
has
ow
ners
hip
in a
ny a
ffili
ates
with
in th
eir h
oldi
ng c
ompa
ny g
roup
. The
risk
-bas
ed c
apita
l for
in
sure
rs a
nd h
ealth
ent
ities
is c
alcu
late
d on
a “
see
thro
ugh”
bas
is (
mul
tiplie
d by
the
perc
ent o
f ow
ners
hip)
. Thi
s re
quire
s “l
ooki
ng th
roug
h” a
ll ho
ldin
g an
d su
bsid
iary
co
mpa
nies
to
the
low
est
leve
l of
ow
ners
hip
for
each
aff
iliat
ed s
tock
inv
estm
ent.
The
adva
ntag
e of
thi
s ap
proa
ch i
s th
at w
here
the
re i
s a
choi
ce o
f w
heth
er t
o ha
ve
owne
rshi
p of
an
asse
t in
eith
er th
e pa
rent
or t
he su
bsid
iary
, RB
C re
sults
are
unl
ikel
y to
aff
ect t
hat d
ecis
ion.
Ther
e ar
e 10
cat
egor
ies o
f sub
sidi
ary
and
affil
iate
d in
vest
men
ts th
at a
re su
bjec
t to
a R
BC
requ
irem
ent f
or c
omm
on st
ock
and
pref
erre
d st
ock.
Tho
se te
n ca
tego
ries a
re:
1.D
irect
ly O
wne
d In
sure
r Sub
ject
To
RB
C
2.In
dire
ctly
Ow
ned
Insu
rer S
ubje
ct T
o R
BC
3.
Dire
ctly
Ow
ned
Hea
lth E
ntity
Sub
ject
To
RB
C
4.In
dire
ctly
Ow
ned
Hea
lth E
ntity
Sub
ject
To
RB
C
5.In
vest
men
t Aff
iliat
es
6.H
oldi
ng C
ompa
ny V
alue
in E
xces
s of I
ndire
ctly
Ow
ned
Subs
idia
ries
7.D
irect
ly O
wne
d A
lien
Insu
ranc
e Su
bsid
iarie
s 8.
Indi
rect
ly O
wne
d A
lien
Insu
ranc
e Su
bsid
iarie
s 9.
Inve
stm
ents
in U
pstre
am A
ffili
ates
(Par
ents
) 10
.O
ther
Aff
iliat
ed In
vest
men
ts
Cod
es (1
thro
ugh
10) w
ill a
ppea
r in
Col
umn
(2) o
f the
Aff
iliat
ed C
ompa
nies
Ris
k pa
ge. T
he p
rogr
am w
ill a
utom
atic
ally
cal
cula
te th
e R
BC
cha
rge
for e
ach
affil
iate
. Whe
n th
e da
ta is
upl
oade
d to
the
NA
IC d
atab
ase,
it w
ill b
e cr
oss-
chec
ked.
The
com
pany
will
be
requ
ired
to c
orre
ct a
ny d
iscr
epan
cies
and
ref
ile a
cor
rect
ed v
ersi
on w
ith th
e N
AIC
and
/or a
ny s
tate
that
requ
ires
the
com
pany
to fi
le R
BC
with
its
depa
rtmen
t. Th
e R
BC
repo
rt w
ill d
ispl
ay th
e nu
mbe
r of s
ubsid
iarie
s an
d af
filia
tes.
Thes
e nu
mbe
rs
shou
ld b
e re
view
ed to
ens
ure
that
all
subs
idia
ries a
nd a
ffili
ates
are
app
ropr
iate
ly re
porte
d.
Line
11
– Fa
ir V
alue
Exc
ess
Aff
iliat
e C
omm
on S
tock
equ
als
the
tota
l of
type
cod
es 1
thro
ugh
4 of
the
Aff
iliat
ed C
ompa
nies
Ris
k –
Det
ails
Pag
e. T
he p
rogr
am w
ill
auto
mat
ical
ly c
alcu
late
this
figu
re.
Aff
iliat
es th
at a
re S
ubje
ct to
RB
C
The
risk-
base
d ca
pita
l req
uire
men
t for
the
repo
rting
com
pany
for t
hose
subs
idia
ries t
hat a
re su
bjec
t to
a ris
k-ba
sed
capi
tal r
equi
rem
ent i
s bas
ed o
n th
e To
tal R
isk-
Bas
ed
Cap
ital A
fter C
ovar
ianc
e of
the
subs
idia
ry, p
rora
ted
for t
he p
erce
nt o
f ow
ners
hip
of th
at su
bsid
iary
. For
pur
pose
s of A
ffili
ate
Risk
all
refe
renc
es to
Tot
al R
isk-
Bas
ed
Cap
ital A
fter
Cov
aria
nce
of th
e su
bsid
iary
or
affil
iate
mea
ns:
For
a H
ealth
subs
idia
ry R
BC fi
ling,
Tot
al R
isk-
Bas
ed C
apita
l Aft
er C
ovar
ianc
e be
fore
Bas
ic O
pera
tiona
l Ris
k (X
R02
5, L
ine
(37)
);Fo
r a
P/C
subs
idia
ry R
BC fi
ling,
Tot
al R
isk-B
ased
Cap
ital A
fter
Cov
aria
nce
befo
re B
asic
Ope
ratio
nal R
isk
(PR
032,
Lin
e (7
3));
and
Fo
r a
Life
subs
idia
ry R
BC fi
ling,
the
sum
of
(a)
Tota
l Ris
k-B
ased
Cap
ital A
fter
Cov
aria
nce
befo
re B
asic
Ope
ratio
nal R
isk
(LR
031,
Lin
e (6
7);
and
(b
) Pr
imar
y Se
curi
ty sh
ortf
alls
for
all c
essi
ons c
over
ed b
y A
ctua
rial
Gui
delin
e X
LVII
I (A
G 4
8), m
ultip
lied
by tw
o (L
R03
1, L
ine
(70)
).
The
risk-
base
d ca
pita
l for
thos
e su
bsid
iarie
s m
ust b
e ca
lcul
ated
prio
r to
com
plet
ing
this
risk
-bas
ed c
apita
l. Th
e fo
llow
ing
rule
s ap
ply
exce
pt w
hen
the
affil
iate
’s c
omm
on
stoc
k is
pub
licly
trad
ed a
nd th
e re
porti
ng c
ompa
ny c
arrie
s th
e af
filia
te a
t fai
r val
ue, a
fter a
ny “
hairc
ut.”
If th
e pa
rent
ow
ns 1
00 p
erce
nt o
f a d
owns
tream
aff
iliat
e he
alth
en
tity,
then
the
pare
nt’s
RB
C r
equi
rem
ent f
or th
at a
sset
is e
qual
to th
e le
sser
of 1
00 p
erce
nt o
f th
e h
ealth
ent
ity’s
RB
C a
fter
cova
rianc
e or
the
book
/adj
uste
d ca
rryi
ng
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
2 10
/20/
2017
valu
e of
the
affil
iate
on
the
pare
nt’s
sta
tem
ent.
If a
par
ent o
wns
50
perc
ent o
f a d
owns
tream
life
insu
ranc
e co
mpa
ny, t
hen
the
pare
nt’s
RB
C re
quire
men
t for
that
ass
et is
th
e le
sser
of h
alf o
f the
RB
C a
fter c
ovar
ianc
e of
its l
ife a
ffilia
te o
r the
boo
k/ad
just
ed c
arry
ing
valu
e of
the
life
affil
iate
on
the
pare
nt’s
stat
emen
t.
If th
e af
filia
te’s
com
mon
sto
ck is
pub
licly
trad
ed a
nd th
e re
porti
ng c
ompa
ny c
arrie
s th
e af
filia
te a
t fai
r val
ue, a
fter a
ny “
hairc
ut,”
ther
e ar
e ge
nera
lly tw
o co
mpo
nent
s to
th
e re
porti
ng c
ompa
ny’s
RB
C g
ener
ated
by
the
affil
iate
. The
pro
rate
d po
rtion
is th
e pe
rcen
tage
of
owne
rshi
p of
tota
l com
mon
and
pre
ferr
ed s
tock
. The
sm
alle
r of
the
pror
ated
por
tion
of th
e af
filia
te’s
ow
n st
atut
ory
surp
lus o
r the
pro
rate
d po
rtion
of i
ts R
BC
afte
r cov
aria
nce
is a
dded
to th
e H
-0 c
ompo
nent
of t
he re
porti
ng c
ompa
ny. I
n th
e no
rmal
cas
e, th
e fa
ir va
lue
of th
e af
filia
te e
xcee
ds th
e pr
orat
ed p
ortio
n of
the
larg
er o
f its
stat
utor
y su
rplu
s and
its R
BC
afte
r cov
aria
nce.
In th
is c
ase,
the
addi
tion
to th
e H
-1
com
pone
nt is
the
larg
er o
f a) 2
2.5
perc
ent o
f the
aff
iliat
e’s
fair
valu
e in
exc
ess o
f the
pro
rate
d po
rtion
of t
he a
ffili
ate’
s sta
tuto
ry s
urpl
us o
r b) t
he p
rora
ted
porti
on o
f the
af
filia
te’s
RB
C a
fter
cova
rianc
e in
exc
ess
of th
e pr
orat
ed p
ortio
n of
its
stat
utor
y su
rplu
s. If
the
affil
iate
’s f
air
valu
e is
less
than
the
pror
ated
por
tion
of it
s R
BC
afte
r co
varia
nce,
but
gre
ater
than
the
pror
ated
por
tion
of i
ts st
atut
ory
surp
lus,
100
perc
ent o
f the
fair
valu
e in
exc
ess o
f the
pro
rate
d po
rtion
of t
he a
ffili
ate’
s sta
tuto
ry su
rplu
s is
adde
d to
the
repo
rting
com
pany
’s H
-1 c
ompo
nent
. If t
he a
ffili
ate’
s fai
r val
ue is
less
than
the
pror
ated
por
tion
of th
e af
filia
tes’
s st
atut
ory
surp
lus,
ther
e is
no
addi
tion
to th
e H
-1 c
ompo
nent
.
The
subs
idia
ries a
ffec
ted
by th
is ru
le a
re:
1.D
irect
ly O
wne
d In
sure
rs S
ubje
ct T
o R
BC
2.
Indi
rect
ly O
wne
d In
sure
rs S
ubje
ct T
o R
BC
3.
Dire
ctly
Ow
ned
Hea
lth E
ntity
Sub
ject
To
RB
C
4.In
dire
ctly
Ow
ned
Hea
lth E
ntity
Sub
ject
To
RB
C
Dire
ctly
ow
ned
insu
ranc
e an
d he
alth
ent
ity s
ubsi
diar
ies
are
subs
idia
ries
in w
hich
the
pare
nt o
wns
the
stoc
k of
the
affil
iate
. Ind
irect
ly o
wne
d in
sura
nce
subs
idia
ries
and
indi
rect
ly o
wne
d he
alth
ent
ities
are
thos
e w
here
the
pare
nt o
wns
sto
ck in
a h
oldi
ng c
ompa
ny, a
nd th
e ho
ldin
g co
mpa
ny in
turn
ow
ns th
e st
ock
of th
e in
sura
nce
subs
idia
ry
or h
ealth
ent
ity.
Dire
ctly
Ow
ned
Insu
ranc
e Su
bsid
iarie
s
Rep
ort i
nfor
mat
ion
rega
rdin
g an
y to
p-la
yer d
irect
ly o
wne
d U
.S. P
rope
rty a
nd C
asua
lty in
sura
nce
subs
idia
ries o
r U.S
. Life
insu
ranc
e su
bsid
iarie
s in
the
sche
dule
. For
eac
h su
bsid
iary
, rep
ort i
ts n
ame,
NA
IC c
ompa
ny c
ode,
aff
iliat
es T
otal
Ris
k-B
ased
Cap
ital a
fter C
ovar
ianc
e, v
alue
of t
he c
omm
on s
tock
from
Sch
edul
e D
, Par
t 6, S
ectio
n 1,
Li
ne 1
1999
99 o
r Lin
e 12
9999
9 in
Col
umns
(1) t
hrou
gh (7
). If
no
valu
e is
repo
rted
in th
e To
tal V
alue
of A
ffili
ate’
s Out
stan
ding
Com
mon
Sto
ck c
olum
n (C
olum
n (7
)), t
he
prog
ram
will
ass
ume
100
perc
ent o
wne
rshi
p. If
the
repo
rting
com
pany
doe
s no
t ow
n an
y of
the
affil
iate
’s c
omm
on s
tock
but
doe
s ow
n pr
efer
red
stoc
k, th
e To
tal V
alue
of
Aff
iliat
e’s O
utst
andi
ng C
omm
on S
tock
in C
olum
n (7
) mus
t be
repo
rted
so th
e pr
ogra
m c
an c
alcu
late
the
perc
ent o
f ow
ners
hip.
Sub
sidia
ries r
epor
ted
in th
is se
ctio
n w
ill b
e as
sign
ed a
n af
filia
te c
ode
of “
1” fo
r dire
ctly
ow
ned
insu
rers
.
The
book
/adj
uste
d ca
rryi
ngva
lue
of a
ny p
refe
rred
stoc
k is
repo
rted
in C
olum
n (9
) and
shou
ld e
qual
the
amou
nt re
porte
d in
Sch
edul
e D
, Par
t 6, S
ectio
n 1,
Lin
e 02
9999
9 or
03
9999
9. T
he to
tal o
utst
andi
ng v
alue
of t
he a
ffili
ate’
s pre
ferr
ed st
ock
is re
porte
d in
Col
umn
(10)
. The
per
cent
age
of o
wne
rshi
p w
ill b
e au
tom
atic
ally
cal
cula
ted
in C
olum
n (1
1). F
or c
ompa
nies
ow
ning
bot
h pr
efer
red
and
com
mon
sto
ck in
the
sam
e su
bsid
iary
, the
per
cent
of
owne
rshi
p is
cal
cula
ted
by s
umm
ing
the
book
/adj
uste
d ca
rryi
ngva
lues
of t
he o
wne
d pr
efer
red
and
com
mon
stoc
k an
d di
vidi
ng th
at a
mou
nt b
y th
e su
m o
f all
outst
andi
ng p
refe
rred
and
com
mon
stoc
k.
The
risk-
base
d ca
pita
l rep
orte
d fo
r eac
h in
sura
nce
subs
idia
ry sh
ould
be
obta
ined
by
usin
g a
sepa
rate
cop
y of
the
Prop
erty
and
Cas
ualty
risk
-bas
ed c
apita
l pro
gram
, Hea
lth
risk-
base
d ca
pita
l pro
gram
or t
he L
ife ri
sk-b
ased
cap
ital p
rogr
am. T
itle
insu
rers
, mon
olin
e fin
anci
al g
uara
nty
insu
rers
and
mon
olin
e m
ortg
age
guar
anty
insu
rers
are
not
su
bjec
t to
risk-
base
d ca
pita
l. A
dditi
onal
ly, s
ome
insu
rers
are
gra
nted
exe
mpt
ions
fro
m f
iling
ris
k-ba
sed
capi
tal.
Thes
e af
filia
tes
and
othe
r si
mila
r af
filia
tes
shou
ld b
e re
porte
d as
Oth
er A
ffili
ated
Inve
stm
ents
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
3 10
/20/
2017
Indi
rect
ly O
wne
d In
sura
nce
Aff
iliat
es
The
repo
rting
com
pany
’s b
ook/
adju
sted
car
ryin
g va
lue
of th
e ho
ldin
g co
mpa
ny s
houl
d be
allo
cate
d be
twee
n an
y to
p-la
yer,
indi
rect
ly o
wne
d in
sura
nce
affil
iate
s an
d th
e H
oldi
ng C
ompa
ny V
alue
in E
xces
s of I
ndire
ctly
Ow
ned
Insu
ranc
e A
ffili
ates
. The
boo
k/ad
just
ed c
arry
ing
valu
e of
the
hold
ing
com
pany
sho
uld
be fi
rst a
lloca
ted
base
d on
th
e va
lues
sho
wn
on th
e ho
ldin
g co
mpa
ny’s
bal
ance
she
et. A
n ex
ampl
e of
the
calc
ulat
ion
is p
rese
nted
in th
e fo
llow
ing
exam
ple.
The
exa
mpl
e sh
ows
a hy
poth
etic
al
hold
ing
com
pany
, Hol
der,
Inc.
, tha
t is 1
00 p
erce
nt o
wne
d by
Big
HM
O a
nd il
lust
rate
s the
allo
catio
n of
Hol
der’
s boo
k/ad
just
ed c
arry
ing
valu
e am
ong
thes
e ca
tego
ries.
Bal
ance
She
et
Hol
der,
Inc.
12
/31/
XX
AB
C L
ife
$4
,000
,000
Long
-Ter
m D
ebt
$1
4,00
0,00
0 X
YZ
HM
O
2,
000,
000
O
ther
Lia
bilit
ies
5,
000,
000
Non
-U.S
. Cas
ualty
6,00
0,00
0
GX
Tod
d R
eal E
stat
e
4,00
0,00
0
Cas
h
5,00
0,00
0
Equi
ty
5,
000,
000
Oth
er A
sset
s
3,00
0,00
0
To
tal A
sset
s
$24,
000,
000
Tota
l Lia
bilit
ies a
nd E
quity
$24,
000,
000
Sinc
e A
BC
Life
Insu
ranc
e C
ompa
ny m
akes
up
one-
sixt
h ($
4,00
0,00
0 di
vide
d by
$24
,000
,000
) of t
he to
tal a
sset
s fo
r Hol
der,
Inc.
, the
n th
is in
dire
ctly
ow
ned
U.S
. aff
iliat
e re
pres
ents
one
-six
th o
f the
boo
k/ad
just
ed c
arry
ing
valu
e of
Hol
der,
Inc.
on
the
stat
emen
t of B
ig H
MO
Com
pany
. Sim
ilarly
, the
indi
rect
ly o
wne
d U
.S. a
ffili
ate
XY
Z H
MO
re
pres
ents
one
-twel
fth o
f the
boo
k/ad
just
ed c
arry
ing
valu
e ($
2,00
0,00
0 di
vide
d by
$24
,000
,000
) of H
olde
r on
Big
HM
O’s
ann
ual s
tate
men
t. N
on-U
.S. C
asua
lty, w
hich
is
an a
lien
insu
ranc
e af
filia
te, r
epre
sent
s on
e-fo
urth
of t
he c
arry
ing
valu
e ($
6,00
0,00
0 di
vide
d by
$24
,000
,000
) of H
olde
r on
Big
HM
O’s
ann
ual s
tate
men
t. O
ne-h
alf o
f the
bo
ok/a
djus
ted
carr
ying
val
ue o
f H
olde
r, In
c. (
$12,
000,
000
divi
ded
by $
24,0
00,0
00)
repr
esen
ts th
e H
oldi
ng C
ompa
ny V
alue
in E
xces
s of
Ind
irect
ly O
wne
d In
sura
nce
Aff
iliat
es. I
f Big
HM
O c
arrie
s H
olde
r, In
c. o
n its
ann
ual s
tate
men
t at $
30,0
00,0
00 (a
ssum
e th
at th
is is
the
curr
ent m
arke
t val
ue o
f sha
res
in H
olde
r, w
hich
was
a p
ublic
ly
trade
d co
rpor
atio
n of
whi
ch B
ig h
as ju
st a
cqui
red
100
perc
ent o
wne
rshi
p), t
hen
Big
HM
O w
ill a
lloca
te o
ne-s
ixth
of
the
$30,
000,
000
to A
BC
Life
, one
-twel
fth o
f th
e $3
0,00
0,00
0 to
XY
Z H
MO
, one
-fou
rth o
f th
e $3
0,00
0,00
0 to
Non
-U.S
. Cas
ualty
, and
one
-hal
f to
Hol
der
unde
r th
e ca
tego
ry H
oldi
ng C
ompa
ny V
alue
in
Exce
ss o
f In
dire
ctly
Ow
ned
Insu
ranc
e A
ffili
ates
. The
RB
C c
harg
e fo
r the
indi
rect
ow
ners
hip
of c
omm
on st
ock
in A
BC
Life
will
be
AB
C’s
Tot
al R
BC
afte
r Cov
aria
nce,
adj
uste
d fo
r pe
rcen
t of o
wne
rshi
p if
Hol
der o
wns
less
than
100
per
cent
. If H
olde
r ow
ns 5
0 pe
rcen
t of A
BC
Life
, the
n on
ly 5
0 pe
rcen
t of t
he R
BC
afte
r Cov
aria
nce
wou
ld b
e en
tere
d in
C
olum
n (4
). H
owev
er, i
n ou
r exa
mpl
e, H
olde
r ow
ns a
ll ou
tsta
ndin
g sh
ares
of A
BC
Life
, XY
Z H
MO
and
Non
-U.S
. Cas
ualty
. The
RB
C c
harg
e fo
r the
indi
rect
ow
ners
hip
of X
YZ
HM
O a
nd N
on-U
.S. C
asua
lty w
ould
be
com
pute
d in
the
sam
e m
anne
r.
If B
ig o
nly
acqu
ired
50 p
erce
nt o
f th
e sh
ares
of
Hol
der,
then
the
tota
l out
stan
ding
com
mon
sto
ck v
alue
in C
olum
n (7
) w
ould
be
adju
sted
to r
efle
ct B
ig H
MO
’s p
artia
l ow
ners
hip
and
a de
term
inat
ion
mad
e as
to th
e na
ture
of t
he c
arry
ing
valu
e of
Hol
der.
If H
olde
r’s
carr
ying
val
ue is
bas
ed o
n ot
her t
han
mar
ket v
alue
, the
n th
e al
loca
tions
fo
llow
as
desc
ribed
in (A
). If
the
carr
ying
val
ue o
f Hol
der i
s ba
sed
on it
s m
arke
t val
ue, t
hen
the
allo
catio
ns a
nd a
ny a
dditi
onal
RB
C d
ue to
the
use
of m
arke
t val
ue a
re
desc
ribed
in (B
).
(A)
The
book
/adj
uste
d ca
rryi
ngva
lue
(not
bas
ed o
n m
arke
t val
ue) o
n B
ig H
MO
’s a
nnua
l sta
tem
ent i
s $1
5,00
0,00
0 w
hich
is a
lloca
ted
as $
2,50
0,00
0 to
AB
C L
ife (o
ne-
sixt
h of
$15
,000
,000
), $1
,250
,000
to X
YZ
HM
O (o
ne-tw
elfth
of
$15,
000,
000)
, $3,
750,
000
to N
on-U
.S. C
asua
lty (
one-
four
th o
f $1
5,00
0,00
0) a
s In
dire
ctly
Ow
ned
Alie
n In
sura
nce
Aff
iliat
e, a
nd 7
,500
,000
to H
olde
r as
the
Hol
ding
Com
pany
Val
ue in
Exc
ess
of I
ndire
ctly
Ow
ned
Aff
iliat
es. T
he to
tal o
utst
andi
ng v
alue
for
the
com
mon
sto
ck o
f AB
C L
ife, C
olum
n (7
), w
ould
be
$5,0
00,0
00 ($
2,50
0,00
0 di
vide
d by
0.5
0) a
nd th
e to
tal o
utst
andi
ng v
alue
of c
omm
on s
tock
for X
YZ
HM
O w
ould
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
4 10
/20/
2017
be $
2,50
0,00
0 ($
1,25
0,00
0 di
vide
d by
.50)
. The
tota
l out
stan
ding
val
ue o
f com
mon
sto
ck fo
r Non
-U.S
. Cas
ualty
wou
ld b
e $7
,500
,000
($3,
750,
000
divi
ded
by 0
.50)
. Th
e to
tal o
utst
andi
ng v
alue
of c
omm
on st
ock
for H
olde
r wou
ld b
e $1
5,00
0,00
0 ($
7,50
0,00
0 di
vide
d by
0.5
0).
(B)
In th
is e
xam
ple
the
book
/adj
uste
d ca
rryi
ng v
alue
(ba
sed
on m
arke
t val
ue)
on B
ig H
MO
’s a
nnua
l sta
tem
ent
is $
18,0
00,0
00, w
hich
will
be
allo
cate
d in
the
sam
e m
anne
r des
crib
ed in
(A) a
bove
. How
ever
, one
add
ition
al s
tep
is a
dded
rega
rdin
g th
e in
dire
ctly
* ow
ned
insu
rers
and
hea
lth e
ntiti
es s
ubje
ct to
RB
C. F
or e
xam
ple,
the
amou
nt o
f Hol
der a
pplic
able
to A
BC
Life
, $3,
000,
000
(1/6
of $
18,0
00,0
00) w
ill a
lso
have
subt
ract
ed fr
om it
, its
stat
utor
y su
rplu
s**
(pro
rate
d 50
per
cent
for i
ts p
artia
l ow
ners
hip)
and
if a
pos
itive
am
ount
resu
lts, t
hen
that
am
ount
will
rece
ive
an R
BC
cha
rge
of 2
2.5
perc
ent a
nd re
porte
d as
a c
ompo
nent
of s
uch
stoc
k in
the
form
ula.
Th
e sa
me
will
app
ly to
XY
Z H
MO
.
The
allo
catio
n of
the
RB
C o
f the
indi
rect
ly o
wne
d af
filia
tes
will
be
auto
mat
ical
ly a
djus
ted
to re
flect
the
fact
that
Big
HM
O o
nly
owns
50
perc
ent o
f the
aff
iliat
es b
ecau
se
Col
umn
(11)
will
div
ide
Col
umn
(5)
by C
olum
n (7
) be
fore
allo
catin
g th
e R
BC
. The
refo
re, o
nly
half
of th
e R
BC
afte
r co
varia
nce
for
thes
e in
dire
ctly
ow
ned
affil
iate
s w
ould
acc
rue
to B
ig H
MO
.
The
info
rmat
ion
for a
ll to
p-la
yer,
indi
rect
ly o
wne
d in
sura
nce
affil
iate
s is r
epor
ted
in th
e ap
prop
riate
col
umns
with
in th
e A
ffili
ated
Com
pani
es R
isk
page
. For
eac
h af
filia
te
repo
rt its
nam
e, N
AIC
com
pany
cod
e an
d th
e pr
o-ra
ted
shar
e of
ris
k-ba
sed
capi
tal a
long
with
all
othe
r in
form
atio
n re
quire
d in
Col
umns
(1)
thro
ugh
(10)
. Sub
sidi
arie
s re
porte
d in
this
sec
tion
will
be
assi
gned
an
affil
iate
cod
e of
“2”
for i
ndire
ctly
ow
ned
insu
rers
. If t
he a
mou
nt in
Col
umn
(5) i
s ba
sed
on fa
ir va
lue,
then
pla
ce a
n “F
” in
C
olum
n (6
) and
the
affil
iate
’s s
tatu
tory
cap
ital a
nd s
urpl
us (a
djus
ted
for o
wne
rshi
p) in
Col
umn
(8).
The
RB
C c
harg
e (if
any
) will
be
calc
ulat
ed b
y th
e fo
rmul
a w
ith th
e re
sult
appe
arin
g in
Col
umns
(12)
and
(13)
.
* T
his s
tep
also
app
lies t
o di
rect
ly o
wne
d in
sure
rs a
nd h
ealth
ent
ities
subj
ect t
o R
BC
. **
The
am
ount
of t
otal
stat
utor
y su
rplu
s app
earin
g on
its f
iled
annu
al st
atem
ent a
s sho
wn
on P
age
3, L
ine
33, C
olum
n 3.
Dire
ctly
Ow
ned
Hea
lth E
ntity
Rep
ort i
nfor
mat
ion
rega
rdin
g an
y to
p-la
yer d
irect
ly o
wne
d he
alth
ent
ity s
ubsi
diar
ies
in th
e sc
hedu
le. F
or e
ach
subs
idia
ry, r
epor
t its
nam
e, N
AIC
com
pany
cod
e, a
ffili
ates
To
tal R
isk-
Bas
ed C
apita
l afte
r cov
aria
nce,
val
ue o
f the
com
mon
sto
ck in
clud
ed in
Sch
edul
e D
, Par
t 6, S
ectio
n 1,
Lin
e 13
9999
9 in
Col
umns
(1) t
hrou
gh (7
). If
no
valu
e is
re
porte
d in
the
Tota
l Val
ue o
f Aff
iliat
e’s
Com
mon
Sto
ck C
olum
n (C
olum
n (7
)), t
he p
rogr
am w
ill a
ssum
e 10
0 pe
rcen
t ow
ners
hip.
If th
e re
porti
ng c
ompa
ny d
oes
not o
wn
any
of th
e af
filia
te’s
com
mon
sto
ck b
ut d
oes
own
pref
erre
d st
ock,
the
Tota
l Val
ue o
f A
ffili
ate’
s C
omm
on S
tock
in C
olum
n (7
) m
ust b
e re
porte
d so
the
prog
ram
can
ca
lcul
ate
the
perc
ent o
f ow
ners
hip.
Sub
sidi
arie
s rep
orte
d in
this
sect
ion
will
be
assi
gned
an
affil
iate
cod
e of
“3”
for d
irect
ly o
wne
d he
alth
ent
ities
.
The
book
/adj
uste
d ca
rryi
ng v
alue
of a
ny p
refe
rred
sto
ck is
repo
rted
in C
olum
n (9
) and
sho
uld
equa
l the
am
ount
repo
rted
in S
ched
ule
D, P
art 6
, Sec
tion
1, L
ine
0499
999.
Th
e to
tal o
utst
andi
ng v
alue
of t
he a
ffili
ate’
s pre
ferr
ed st
ock
is re
porte
d in
Col
umn
(10)
. The
per
cent
age
of o
wne
rshi
p w
ill b
e au
tom
atic
ally
cal
cula
ted
in C
olum
n (1
1). F
or
com
pani
es o
wni
ng b
oth
pref
erre
d an
d co
mm
on s
tock
in th
e sa
me
subs
idia
ry, t
he p
erce
nt o
f ow
ners
hip
is c
alcu
late
d by
sum
min
g th
e bo
ok/a
djus
ted
carr
ying
val
ues
of th
e ow
ned
pref
erre
d an
d co
mm
on st
ock
and
divi
ding
that
am
ount
by
the
sum
of a
ll ou
tsta
ndin
g pr
efer
red
and
com
mon
stoc
k.
The
risk-
base
d ca
pita
l to
be
repo
rted
for
each
ins
uran
ce s
ubsi
diar
y sh
ould
be
obta
ined
by
usin
g a
sepa
rate
cop
y of
the
hea
lth r
isk-
base
d ca
pita
l pr
ogra
m f
or e
ach
subs
idia
ry.
Indi
rect
ly O
wne
d H
ealth
Ent
ity
Indi
rect
ly o
wne
d he
alth
ent
ity a
ffili
ates
are
trea
ted
in a
man
ner s
imila
r to
indi
rect
ly o
wne
d in
sura
nce
affil
iate
s. N
ote
that
the
heal
th e
ntity
aff
iliat
e m
ust b
e su
bjec
t to
risk-
base
d ca
pita
l and
file
a ri
sk-b
ased
cap
ital r
epor
t to
be in
clud
ed in
this
sect
ion.
Oth
erw
ise,
the
affil
iate
’s v
alue
will
be
incl
uded
in th
e H
oldi
ng C
ompa
ny V
alue
in E
xces
s of
Insu
ranc
e A
ffili
ates
sect
ion.
Sub
sidi
arie
s rep
orte
d in
this
sect
ion
will
be
assi
gned
an
affil
iate
cod
e of
“4”
for i
ndire
ctly
ow
ned
heal
th e
ntity
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
5 10
/20/
2017
Aff
iliat
es th
at a
re n
ot S
ubje
ct to
Ris
k-B
ased
Cap
ital
This
cat
egor
y in
clud
es th
e la
st si
x ca
tego
ries o
f aff
iliat
ed in
vest
men
ts:
5.In
vest
men
t Aff
iliat
es
6.H
oldi
ng C
ompa
ny V
alue
in E
xces
s of I
ndire
ctly
Ow
ned
Subs
idia
ries
7.D
irect
ly O
wne
d A
lien
Insu
ranc
e Su
bsid
iarie
s 8.
Indi
rect
ly O
wne
d A
lien
Insu
ranc
e Su
bsid
iarie
s 9.
Inve
stm
ents
in U
pstre
am A
ffili
ates
(Par
ents
) 10
.O
ther
Aff
iliat
ed In
vest
men
ts
Insu
ranc
e af
filia
tes
that
are
not
sub
ject
to r
isk-
base
d ca
pita
l, su
ch a
s tit
le in
sure
rs, m
onol
ine
finan
cial
gua
rant
y in
sure
rs, a
nd m
onol
ine
mor
tgag
e gu
aran
ty in
sure
rs a
re
clas
sifie
d as
Oth
er A
ffili
ated
Inve
stm
ents
.
The
risk-
base
d ca
pita
l cha
rge
for
thes
e in
vest
men
ts is
cal
cula
ted
by m
ultip
lyin
g a
fact
or ti
mes
the
book
/adj
uste
d ca
rryi
ng v
alue
of
the
com
mon
and
pre
ferr
ed s
tock
of
thos
e af
filia
tes.
The
risk-
base
d ca
pita
l fac
tor
for
Alie
n In
sura
nce
Aff
iliat
es is
100
per
cent
; the
fac
tor
for
Inve
stm
ent A
ffili
ates
; Hol
ding
Com
pany
Val
ue in
Exc
ess
of
Indi
rect
ly O
wne
d A
ffili
ates
, Inv
estm
ents
in
Ups
tream
Aff
iliat
es (
Pare
nts)
, and
Oth
er A
ffili
ated
Inv
estm
ents
is
30 p
erce
nt o
f th
e bo
ok/a
djus
ted
carr
ying
val
ue o
f th
e co
mm
on a
nd p
refe
rred
stoc
k of
thos
e af
filia
tes.
Inve
stm
ent A
ffili
ates
An
inve
stm
ent a
ffili
ate
is a
n af
filia
te th
at e
xist
s on
ly to
inve
st th
e fu
nds
of th
e pa
rent
com
pany
. The
term
“in
vest
men
t aff
iliat
e” is
stri
ctly
def
ined
in th
e N
AIC
’s A
nnua
l St
atem
ent I
nstru
ctio
ns a
s an
y af
filia
te, o
ther
than
a h
oldi
ng c
ompa
ny, e
ngag
ed o
r org
aniz
ed p
rimar
ily to
eng
age
in th
e ow
ners
hip
and
man
agem
ent o
f inv
estm
ents
for t
he
insu
rer.
An
inve
stm
ent a
ffili
ate
shal
l not
incl
ude
any
brok
er, d
eale
r or a
mon
ey m
anag
emen
t fun
d, m
anag
ing
fund
s oth
er th
an th
ose
of th
e pa
rent
com
pany
. The
risk
-bas
ed
capi
tal f
or a
n in
vest
men
t in
an in
vest
men
t aff
iliat
e is
30
perc
ent o
f the
boo
k/ad
just
ed c
arry
ing
valu
e of
the
com
mon
and
pre
ferre
d st
ock.
Hol
ding
Com
pany
Val
ue in
Exc
ess o
f Ind
irect
ly O
wne
d A
ffili
ates
The
risk-
base
d ca
pita
l cha
rge
for t
he p
aren
t ins
urer
pre
parin
g th
e ca
lcul
atio
n is
a 3
0 pe
rcen
t cha
rge
agai
nst t
he h
oldi
ng c
ompa
ny v
alue
in e
xces
s of
the
indi
rect
ly o
wne
d in
sura
nce
affil
iate
s as c
alcu
late
d in
the
prio
r exa
mpl
e.
Rep
ort i
nfor
mat
ion
in th
e ap
prop
riate
col
umns
of t
he A
ffili
ated
Com
pani
es R
isk
page
, om
ittin
g th
ose
colu
mns
that
do
not a
pply
(Col
umn
(3) –
NA
IC C
ompa
ny C
ode
orA
lien
ID N
umbe
r and
Col
umn
(4) a
ffili
ate’
s ris
k-ba
sed
capi
tal).
The
tota
l of
Indi
rect
ly O
wne
d In
sure
rs, I
ndire
ctly
Ow
ned
Hea
lth E
ntiti
es, I
ndire
ctly
Ow
ned
Alie
n In
sure
rs, a
nd th
e am
ount
of
Hol
ding
Com
pany
Val
ue in
Exc
ess
of
Indi
rect
ly O
wne
d In
sura
nce
Aff
iliat
es s
houl
d eq
ual S
ched
ule
D, P
art 6
, Sec
tion
1, L
ine
0699
999
for t
he re
porti
ng o
f pre
ferr
ed s
tock
and
Sch
edul
e D
, Par
t 6, S
ectio
n 1,
Li
ne 1
5999
99 fo
r com
mon
stoc
k.
Dire
ctly
Ow
ned
Alie
n In
sura
nce
Aff
iliat
es
For
purp
oses
of
this
for
mul
a, th
e ris
k-ba
sed
capi
tal o
f ea
ch d
irect
ly o
wne
d al
ien
insu
ranc
e af
filia
te is
the
annu
al s
tate
men
t car
ryin
g va
lue
of th
e re
porti
ng c
ompa
ny’s
in
tere
st in
the
affil
iate
mul
tiplie
d by
100
per
cent
. Rep
ort i
nfor
mat
ion
for a
ny n
on-U
.S. i
nsur
ance
aff
iliat
e, b
oth
Life
and
Pro
perty
and
Cas
ualty
.
For e
ach
affil
iate
, rep
ort t
he n
ame,
Alie
n In
sure
r Ide
ntifi
catio
n N
umbe
r, th
e bo
ok/a
djus
ted
carr
ying
val
ue o
f com
mon
and
pre
ferre
d st
ock,
and
the
tota
l out
stan
ding
val
ue
of c
omm
on a
nd p
refe
rred
stoc
k. C
ompa
nies
repo
rted
in th
is se
ctio
n w
ill b
e as
sign
ed a
n af
filia
te c
ode
of “
7” fo
r dire
ctly
ow
ned
alie
n in
sure
rs.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
6 10
/20/
2017
The
tota
l of A
lien
Insu
ranc
e A
ffili
ates
shou
ld e
qual
the
amou
nts r
epor
ted
in S
ched
ule
D, P
art 6
, Sec
tion
1, L
ine
0599
999
and
Line
149
9999
.
Indi
rect
ly O
wne
d A
lien
Insu
ranc
e A
ffili
ates
The
risk-
base
d ca
pita
l of e
ach
indi
rect
ly o
wne
d al
ien
insu
ranc
e af
filia
te is
the
carr
ying
val
ue o
f the
hol
ding
com
pany
’s in
tere
st in
the
affil
iate
mul
tiplie
d by
100
per
cent
, an
d ad
just
ed to
ref
lect
the
repo
rting
com
pany
’s o
wne
rshi
p on
the
hold
ing
com
pany
. Sub
sidia
ries
repo
rted
in th
is s
ectio
n w
ill b
e as
sign
ed a
n af
filia
te c
ode
of “
8” f
or
indi
rect
ly o
wne
d al
ien
insu
rers
.
Inve
stm
ent i
n U
pstre
am A
ffili
ate
(Par
ent)
The
risk-
base
d ca
pita
l for
an
inve
stm
ent i
n an
ups
tream
par
ent i
s 30
per
cent
of t
he b
ook/
adju
sted
car
ryin
g va
lue
of th
e co
mm
on a
nd p
refe
rred
sto
ck re
gard
less
of w
heth
er
that
ups
tream
par
ent
is s
ubje
ct t
o ris
k-ba
sed
capi
tal
or n
ot. R
epor
t th
e ap
prop
riate
inf
orm
atio
n fr
om S
ched
ule
D, P
art
6, S
ectio
n 1,
Lin
es 0
1999
99 a
nd 1
0999
99 i
n C
olum
ns (1
) thr
ough
(10)
. The
aff
iliat
e co
de fo
r an
upst
ream
par
ent i
s “9.
”
Oth
er A
ffili
ated
Inve
stm
ents
The
risk-
base
d ca
pita
l for
an
inve
stm
ent i
n an
Oth
er A
ffili
ated
Inv
estm
ent i
s 30
per
cent
of
the
book
/adj
uste
d ca
rryi
ng v
alue
of
the
com
mon
and
pre
ferr
ed s
tock
. All
insu
ranc
e af
filia
tes
that
do
not o
ther
wis
e qu
alify
for a
noth
er s
ectio
n of
this
repo
rt, s
uch
as ti
tle in
sura
nce
com
pani
es, o
r a L
ife in
sura
nce
affil
iate
that
has
bee
n ex
empt
ed
from
the
risk-
base
d ca
pita
l sys
tem
are
to b
e in
clud
ed in
this
cat
egor
y. T
he a
ffili
ate
code
for O
ther
Aff
iliat
ed In
vest
men
ts is
“10
.” R
epor
ted
amou
nts
use
Sche
dule
D, P
art
6, S
ectio
n 1,
Lin
e 08
9999
9 an
d Li
ne 1
7999
99 a
s th
e ba
sis
of r
epor
ting
and
addi
tiona
lly in
clud
e an
y Li
fe a
nd P
rope
rty a
nd C
asua
lty in
sure
rs n
ot s
ubje
ct to
ris
k-ba
sed
capi
tal (
as d
iscu
ssed
ear
lier)
.
OFF
-BA
LA
NC
E S
HE
ET
AN
D O
TH
ER
ITE
MS
XR
005
Off
-bal
ance
she
et it
ems,
such
as
cont
inge
nt li
abili
ties,
pose
a r
isk
to in
sure
rs. A
1 p
erce
nt f
acto
r w
as c
hose
n on
a ju
dgm
ent b
asis
to a
llow
for
this
ris
k. F
or s
ecur
ities
le
ndin
g pr
ogra
ms,
a re
duce
d ch
arge
may
app
ly to
cer
tain
pro
gram
s tha
t mee
t the
crit
eria
as o
utlin
ed b
elow
.
Spec
ific
Inst
ruct
ions
for A
pplic
atio
n of
the
Form
ula
Line
(1)
Secu
ritie
s len
ding
pro
gram
s tha
t hav
e al
l of t
he fo
llow
ing
elem
ents
are
elig
ible
for a
low
er o
ff-b
alan
ce sh
eet c
harg
e:
1.A
writ
ten
plan
ado
pted
by
the
Boa
rd o
f D
irect
ors
that
out
lines
the
exte
nt to
whi
ch th
e in
sure
r ca
n en
gage
in s
ecur
ities
lend
ing
activ
ities
and
how
cas
h co
llate
ral r
ecei
ved
will
be
inve
sted
. 2.
Writ
ten
oper
atio
nal p
roce
dure
s to
mon
itor a
nd c
ontro
l the
risk
ass
ocia
ted
with
sec
uriti
es le
ndin
g. S
afeg
uard
s to
be
addr
esse
d sh
ould
, at a
min
imum
, pro
vide
as
sura
nce
of th
e fo
llow
ing:
a.
Doc
umen
ted
inve
stm
ent g
uide
lines
bet
wee
n le
nder
and
inve
stm
ent m
anag
er w
ith e
stab
lishe
d pr
oced
ure
for r
evie
w o
f com
plia
nce.
b.
Inve
stm
ent g
uide
lines
for c
ash
colla
tera
l tha
t cle
arly
del
inea
te li
quid
ity, d
iver
sific
atio
n, c
redi
t qua
lity,
and
ave
rage
life
/dur
atio
n re
quire
men
ts.
c.A
ppro
ved
borr
ower
list
s and
lim
its to
allo
w fo
r ade
quat
e di
vers
ifica
tion.
d.
Hol
ding
exc
ess
colla
tera
l w
ith m
argi
n pe
rcen
tage
s in
lin
e w
ith i
ndus
try s
tand
ards
, w
hich
are
cur
rent
ly 1
02 p
erce
nt (
or 1
05 p
erce
nt f
or c
ross
cu
rren
cy lo
ans)
. e.
Dai
ly m
ark-
to-m
arke
t of l
ent s
ecur
ities
and
obt
aini
ng a
dditi
onal
col
late
ral n
eede
d to
mai
ntai
n a
mar
gin
of 1
02 p
erce
nt o
f mar
ket.
f.N
ot su
bjec
t to
any
auto
mat
ic st
ay in
ban
krup
tcy
and
may
be
clos
ed o
ut a
nd te
rmin
ated
imm
edia
tely
upo
n th
e ba
nkru
ptcy
of a
ny p
arty
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
7 10
/20/
2017
3.A
bin
ding
sec
uriti
es le
ndin
g ag
reem
ent (
stan
dard
“M
aste
r Se
curit
ies
Lend
ing
Agr
eem
ent”
fro
m S
ecur
ities
Ind
ustry
and
Fin
anci
al M
arke
ts A
ssoc
iatio
n) in
w
ritin
g be
twee
n th
e in
sure
r, or
its a
gent
on
beha
lf of
the
insu
rer,
and
the
borr
ower
s. 4.
Acc
epta
ble
colla
tera
l is
defin
ed a
s ca
sh, c
ash
equi
vale
nts,
dire
ct o
blig
atio
ns o
f, or
sec
uriti
es th
at a
re f
ully
gua
rant
eed
as to
prin
cipa
l and
inte
rest
by
the
gove
rnm
ent o
f the
Uni
ted
Stat
es o
r any
age
ncy
of th
e U
nite
d St
ates
, or b
y th
e Fe
dera
l Nat
iona
l Mor
tgag
e A
ssoc
iatio
n or
the
Fede
ral H
ome
Loan
Mor
tgag
e C
orpo
ratio
n an
d N
AIC
1-r
ated
sec
uriti
es. A
ffili
ate-
issu
ed c
olla
tera
l w
ould
not
be
deem
ed a
ccep
tabl
e. I
n al
l ca
ses
the
colla
tera
l he
ld m
ust
be p
erm
itted
in
vest
men
ts in
the
stat
e of
dom
icile
for t
he re
spec
tive
insu
rer.
Col
late
ral i
nclu
ded
in G
ener
al In
terr
ogat
orie
s Par
t 1, L
ine
24.0
5 of
the
annu
al st
atem
ent s
houl
d be
incl
uded
on
Line
(1).
Line
(2) –
Col
late
ral f
rom
all
othe
r sec
uriti
es le
ndin
g pr
ogra
ms s
houl
d be
repo
rted
in G
ener
al In
terr
ogat
orie
s Par
t 1, L
ine
24.0
6 an
d in
clud
ed in
Lin
e (2
).
Line
s (3
) thr
ough
(14)
– N
on-c
ontro
lled
asse
ts a
re a
ny a
sset
s re
porte
d on
the
bala
nce
shee
t tha
t are
not
exc
lusi
vely
und
er th
e co
ntro
l of t
he c
ompa
ny, o
r ass
ets
that
hav
e be
en s
old
or t
rans
ferr
ed s
ubje
ct t
o a
put
optio
n co
ntra
ct c
urre
ntly
in
forc
e. F
or L
ines
(12
) an
d (1
3),
incl
ude
asse
ts p
ledg
ed a
s co
llate
ral
repo
rted
in t
he G
ener
al
Inte
rrog
ator
ies P
art 1
, Lin
es 2
5.30
and
25.
31 o
ther
than
ass
ets r
elat
ed to
the
Fede
ral R
eser
ve’s
Ter
m A
sset
Loa
n Fa
cilit
y (T
ALF
).
Line
(16)
– G
uara
ntee
s fo
r Aff
iliat
es in
clud
e lo
an g
uara
ntee
s or
oth
er u
nder
taki
ngs
for t
he b
enef
it of
an
affil
iate
whi
ch re
sults
in a
mat
eria
l con
tinge
nt e
xpos
ure
of th
e co
mpa
ny’s
or a
ny a
ffili
ated
insu
rer’
s ass
ets.
The
defin
ition
of “
mat
eria
l” e
xpos
ure
or fi
nanc
ial e
ffec
t is t
he sa
me
as fo
r ann
ual s
tate
men
t dis
clos
ure
requ
irem
ents
.
Line
(17)
– C
ontin
gent
liab
ilitie
s in
clud
e an
y m
ater
ial c
ontin
gent
liab
ilitie
s th
at a
re d
iscl
osed
in th
e N
otes
to F
inan
cial
Sta
tem
ents
. Thi
s ca
tego
ry in
clud
es a
ll st
ruct
ured
se
curi
ties f
or w
hich
the
com
pany
has
not
rece
ived
a fu
ll re
leas
e of
liab
ility
from
a th
ird
part
y.
Line
(18)
– “
Yes
” m
eans
the
entit
y w
hich
file
s th
e U
.S. f
eder
al in
com
e ta
x re
turn
whi
ch in
clud
es th
e re
porti
ng e
ntity
is a
regu
late
d in
sura
nce
com
pany
(inc
ludi
ng w
here
th
e re
porti
ng e
ntity
is th
e di
rect
file
r of t
he ta
x re
turn
). “N
o” m
eans
the
entit
y w
hich
file
s th
e U
.S. F
eder
al in
com
e ta
x re
turn
whi
ch in
clud
es th
e re
porti
ng e
ntity
is n
ot a
re
gula
ted
insu
ranc
e co
mpa
ny (e
.g. a
non
-insu
ranc
e en
tity
or h
oldi
ng c
ompa
ny m
akes
the
filin
g). “
N/A
” m
eans
the
entit
y is
exe
mpt
from
filin
g a
U.S
. Fed
eral
inco
me
tax
retu
rn; L
ines
(19)
and
(20)
shou
ld b
e ze
ro in
this
cas
e.
Line
s (1
9) a
nd (2
0) -
App
ly a
one
-per
cent
(1%
) cha
rge
in th
e R
BC
form
ula,
pla
ced
outs
ide
of th
e co
varia
nce
adju
stm
ent,
to a
dmitt
ed a
djus
ted
gros
s de
ferr
ed ta
x as
sets
(D
TAs)
as
desc
ribed
in S
SAP
No.
101
—In
com
e Ta
xes,
para
grap
hs 1
1a a
nd 1
1b (
less
er o
f pa
ragr
aph
11b(
i) an
d 11
b(ii)
). F
or th
e pe
riod
for
whi
ch th
e pa
ragr
aph
11a
com
pone
nt is
det
erm
ined
, the
cha
rge
is re
duce
d to
one
-hal
f per
cent
(0.5
%) w
hen
the
insu
ranc
e co
mpa
ny e
ither
file
d its
ow
n se
para
te U
.S. F
eder
al in
com
e ta
x re
turn
or i
t w
as in
clud
ed in
a c
onso
lidat
ed U
.S. F
eder
al in
com
e ta
x of
whi
ch th
e co
mm
on p
aren
t is
an in
sura
nce
com
pany
. Th
e so
urce
for t
he D
TA a
mou
nts t
o us
e in
the
calc
ulat
ion
is f
ound
in
the
Ann
ual
Stat
emen
t, N
otes
to
Fina
ncia
l St
atem
ents
, Not
e 9,
Par
t A
, Sec
tion
2, A
dmis
sion
Cal
cula
tion
Com
pone
nts
for
SSAP
No.
101
—In
com
e Ta
xes.
Para
grap
h 11
a is
foun
d in
Sec
tion
2, su
bpar
t (a)
, Par
agra
ph 1
1b is
foun
d in
Sec
tion
2, su
bpar
t (b)
.
OFF
-BA
LA
NC
E S
HE
ET
SE
CU
RIT
Y L
EN
DIN
G C
OL
LA
TE
RA
L A
ND
SC
HE
DU
LE
DL
, PA
RT
1 A
SSE
TS
XR
006
Secu
rity
lend
ing
prog
ram
s ar
e re
quire
d to
mai
ntai
n co
llate
ral.
Som
e en
titie
s po
st th
e co
llate
ral s
uppo
rting
sec
urity
lend
ing
prog
ram
s on
thei
r fin
anci
al s
tate
men
ts, a
nd
incu
r th
e re
late
d ris
k ch
arge
s on
tho
se a
sset
s. O
ther
ent
ities
hav
e co
llate
ral
that
is
not
reco
rded
on
thei
r fin
anci
al s
tate
men
ts.
Whi
le n
ot r
ecor
ded
on t
he f
inan
cial
st
atem
ents
of t
he c
ompa
ny, s
uch
colla
tera
l has
risk
s tha
t are
not
oth
erw
ise
capt
ured
in th
e R
BC
form
ula.
The
colla
tera
l in
thes
e ac
coun
ts is
mai
ntai
ned
by a
third
par
ty (
typi
cally
a b
ank
or o
ther
age
nt).
The
colla
tera
l age
nt m
aint
ains
on
beha
lf of
the
com
pany
det
ail a
sset
lis
tings
of t
he c
olla
tera
l ass
ets,
and
this
dat
a is
the
sour
ce fo
r pre
para
tion
of th
is sc
hedu
le. T
he c
ompa
ny sh
ould
mai
ntai
n su
ch a
sset
list
ings
, at a
min
imum
CU
SIP,
mar
ket
valu
e, b
ook/
adju
sted
car
ryin
g va
lue,
and
mat
urity
dat
e.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
8 10
/20/
2017
The
asse
t ris
k ch
arge
s ar
e de
rived
from
exi
stin
g R
BC
fact
ors
for b
onds
, pre
ferr
ed a
nd c
omm
on s
tock
s, ot
her i
nves
ted
asse
ts, a
nd in
vest
ed a
sset
s no
t oth
erw
ise
clas
sifie
d (a
ggre
gate
writ
e-in
s).
Spec
ific
Inst
ruct
ions
for A
pplic
atio
n of
the
Form
ula
Col
umn
(2) –
Sch
edul
e D
L, P
art 1
Boo
k/A
djus
ted
Car
ryin
g V
alue
com
es fr
om A
nnua
l Sta
tem
ent S
ched
ule
DL,
Par
t 1, C
olum
n (6
) Sec
uriti
es L
endi
ng C
olla
tera
l Ass
ets
repo
rted
On-
Bal
ance
She
et (A
sset
s Pag
e, L
ine
10).
Off
-bal
ance
shee
t col
late
ral i
nclu
ded
in G
ener
al In
terr
ogat
orie
s Par
t 1, L
ines
24.
05 a
nd 2
4.06
of t
he a
nnua
l sta
tem
ent s
houl
d ag
ree
with
Lin
e (2
2), C
olum
n (1
).
Line
s (1)
thro
ugh
(9) –
Bon
ds –
Bon
d fa
ctor
s des
crib
ed o
n pa
ge X
R00
7 –
Fixe
d In
com
e A
sset
s
Line
(10)
thro
ugh
(16)
– P
refe
rred
Sto
ck –
Pre
ferr
ed st
ock
fact
ors d
escr
ibed
on
page
XR
009
– Eq
uity
Ass
ets
Line
(17)
– C
omm
on S
tock
– C
omm
on st
ock
fact
ors d
escr
ibed
on
page
XR
009
– Eq
uity
Ass
ets
Line
(18)
– R
eal E
stat
e an
d Pr
oper
ty a
nd E
quip
men
t Ass
ets
– R
eal E
stat
e an
d Pr
oper
ty a
nd E
quip
men
t Ass
ets
fact
ors
desc
ribed
on
page
XR
010
– Pr
oper
ty &
Equ
ipm
ent
Ass
ets
Line
(19)
– O
ther
Inve
sted
Ass
ets –
Oth
er in
vest
ed a
sset
s fac
tor d
escr
ibed
on
page
XR
007
– Fi
xed
Inco
me
Ass
ets
Line
(20)
– M
ortg
age
Loan
s on
Rea
l Est
ate
– M
ortg
age
Loan
s on
Rea
l Est
ate
fact
ors d
escr
ibed
on
page
XR
007
– Fi
xed
Inco
me
Ass
ets
Line
(21)
– C
ash,
Cas
h Eq
uiva
lent
s and
Sho
rt-Te
rm In
vest
men
ts –
Cas
h, C
ash
Equi
vale
nts a
nd S
hort-
Term
Inve
stm
ents
fact
ors d
escr
ibed
on
page
XR
007
– Fi
xed
Inco
me
Ass
ets
FIX
ED
INC
OM
E A
SSE
TS
XR
007
The
RB
C re
quire
men
t for
fixe
d in
com
e as
sets
is la
rgel
y dr
iven
by
the
defa
ult r
isk
on th
ose
asse
ts. T
here
are
two
maj
or s
ubca
tego
ries:
Bon
ds a
nd M
isce
llane
ous.
Bon
ds
are
oblig
atio
ns i
ssue
d by
bus
ines
s un
its,
gove
rnm
enta
l un
its,
and
certa
in n
onpr
ofit
units
, ha
ving
a f
ixed
sch
edul
e fo
r on
e or
mor
e fu
ture
pay
men
ts o
f m
oney
. Th
is
defin
ition
incl
udes
com
mer
cial
pap
er, n
egot
iabl
e ce
rtific
ates
of
depo
sit,
repu
rcha
se a
gree
men
ts, a
nd e
quip
men
t tru
st c
ertif
icat
es. M
isce
llane
ous
fixed
inco
me
asse
ts a
re
othe
r ass
ets w
ith fi
xed
repa
ymen
ts sc
hedu
les,
such
as m
ortg
ages
and
col
late
ral l
oans
.
Bon
ds
The
bond
fact
ors
are
base
d on
cas
h flo
w m
odel
ing
usin
g hi
stor
ical
ly a
djus
ted
defa
ult r
ates
for e
ach
bond
cat
egor
y. F
or e
ach
of 2
,000
tria
ls, a
nnua
l eco
nom
ic c
ondi
tions
w
ere
gene
rate
d fo
r th
e te
n-ye
ar m
odel
ing
perio
d. E
ach
bond
of
a 40
0-bo
nd p
ortfo
lio w
as a
nnua
lly te
sted
for
def
ault
(bas
ed o
n a
“rol
l of
the
dice
”) w
here
the
defa
ult
prob
abili
ty v
arie
s by
des
igna
tion
cate
gory
and
that
yea
r’s
econ
omic
env
ironm
ent.
Whe
n a
defa
ult t
akes
pla
ce, t
he a
ctua
l los
s co
nsid
ers
the
expe
cted
prin
cipa
l los
s by
ca
tego
ry,
the
time
until
the
sal
e ac
tual
ly o
ccur
s, an
d th
e as
sum
ed t
ax c
onse
quen
ces.
Onl
y de
faul
t ris
k is
rec
ogni
zed
in t
he R
BC
fac
tors
bec
ause
, un
der
stat
utor
y ac
coun
ting,
bon
ds a
re g
ener
ally
car
ried
at th
eir a
mor
tized
val
ue o
n th
e st
atut
ory
annu
al st
atem
ent,
so c
hang
es in
the
mar
ket v
alue
of t
he b
onds
follo
win
g sw
ings
in in
tere
st
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
9 10
/20/
2017
rate
s do
not
, as
a ge
nera
l rul
e, a
ffec
t the
cap
ital a
nd s
urpl
us o
f th
e re
gula
ted
entit
ies
unle
ss th
e bo
nds
are
actu
ally
sol
d. T
he a
ccou
ntin
g fo
r re
porti
ng e
ntiti
es c
an b
e su
bsta
ntia
lly d
iffer
ent f
rom
oth
er re
gula
ted
entit
ies,
but t
he R
BC
form
ula
cont
inue
s to
reco
gniz
e on
ly d
efau
lt ris
k.
Ther
e is
no
RB
C r
equi
rem
ent
for
bond
s gu
aran
teed
by
the
full
faith
and
cre
dit
of t
he U
nite
d St
ates
bec
ause
the
re i
s vi
rtual
ly n
o de
faul
t ris
k as
soci
ated
with
the
se
secu
ritie
s.
The
fact
or fo
r NA
IC 0
6 bo
nds r
ecog
nize
s tha
t the
boo
k/ad
just
ed c
arry
ing
valu
e of
thes
e bo
nds r
efle
cts a
loss
of v
alue
upo
n de
faul
t by
bein
g m
arke
d to
mar
ket.
The
book
/adj
uste
d ca
rryi
ng v
alue
of
all
bond
s an
d re
late
d fix
ed i
ncom
e in
vest
men
ts s
houl
d be
rep
orte
d in
Col
umn
(1).
The
bond
s ar
e sp
lit in
to s
even
diff
eren
t ris
k cl
assi
ficat
ions
. The
se ri
sk c
lass
ifica
tions
are
bas
ed o
n th
e N
AIC
des
igna
tions
ass
igne
d. F
or lo
ng-te
rm b
onds
, the
se c
lass
ifica
tions
are
foun
d on
Lin
es 1
0.1
thro
ugh
10.6
le
ss th
e hy
brid
s Lin
es 7
.1 th
roug
h 7.
6 of
Sch
edul
e D
, Par
t 1A
, Sec
tion
1 of
the
annu
al st
atem
ent.
Ente
r the
boo
k/ad
just
ed c
arry
ing
valu
e of
the
bond
s, by
NA
IC d
esig
natio
n ca
tego
ry, i
n C
olum
n (1
). Th
e R
BC
requ
irem
ent w
ill b
e au
tom
atic
ally
cal
cula
ted
in C
olum
n (2
).
Mis
cella
neou
s Fix
ed In
com
e A
sset
s Th
e fa
ctor
for c
ash
is 0
.3 p
erce
nt. I
t is
reco
gniz
ed th
at th
ere
is a
sm
all r
isk
rela
ted
to p
ossi
ble
inso
lven
cy o
f the
ban
k w
here
cas
h de
posi
ts a
re h
eld.
Thi
s fa
ctor
, equ
ival
ent
to a
n un
affil
iate
d N
AIC
01
bond
, ref
lect
s th
e sh
ort-t
erm
nat
ure
of th
is ri
sk. T
he re
quire
d ris
k-ba
sed
capi
tal f
or c
ash
will
not
be
less
than
zer
o, e
ven
if th
e co
mpa
ny’s
cas
h po
sitio
n is
neg
ativ
e.
The
Shor
t-Ter
m In
vest
men
ts to
be
incl
uded
in th
is s
ectio
n ar
e th
ose
shor
t-ter
m in
vest
men
ts n
ot re
flect
ed e
lsew
here
in th
e fo
rmul
a. T
he 0
.3 p
erce
nt fa
ctor
is e
qual
to th
e fa
ctor
for
cas
h. T
he a
mou
nt e
nter
ed h
ere
shou
ld e
qual
the
tot
al s
hort-
term
inv
estm
ents
fou
nd i
n Sc
hedu
le D
A, P
art
1, C
olum
n 7,
Lin
e83
9999
9 le
ss b
onds
tha
t ar
e co
ntai
ned
in S
ched
ule
D, P
art 1
A, S
ectio
n 1.
Col
late
ral l
oans
and
mor
tgag
e lo
ans
are
gene
rally
a s
mal
l por
tion
of th
e to
tal p
ortfo
lio v
alue
. A f
acto
r of
5 p
erce
nt is
con
sist
ent w
ith o
ther
ris
k-ba
sed
capi
tal f
orm
ulas
st
udie
d by
the
wor
king
gro
up.
The
book
adj
uste
d ca
rryi
ng v
alue
of N
AIC
01
and
02 W
orki
ng C
apita
l Fin
ance
Inve
stm
ents
, Lin
es (2
4) a
nd (2
5), s
houl
d eq
ual t
he N
otes
to F
inan
cial
Sta
tem
ent,
Line
s 5M
(01a
) and
5M
(01b
), C
olum
n 3
of th
e an
nual
stat
emen
t.
Oth
er L
ong-
Term
Inv
este
d A
sset
s ar
e th
ose
that
are
list
ed in
Sch
edul
e B
A a
nd a
re s
omew
hat m
ore
spec
ulat
ive
and
risky
than
mos
t oth
er in
vest
men
ts. T
here
fore
, a 2
0 pe
rcen
t fac
tor i
s con
sist
ent w
ith o
ther
risk
-bas
ed c
apita
l for
mul
as st
udie
d by
the
wor
king
gro
up.
Low
inco
me
hous
ing
tax
cred
it in
vest
men
ts a
re re
porte
d in
Col
umn
(1) i
n ac
cord
ance
with
SSA
P No
. 93—
Low
Inco
me
Hou
sing
Tax
Cre
dit P
rope
rty
Inve
stmen
ts.
Fede
ral G
uara
ntee
d Lo
w-I
ncom
e H
ousi
ng T
ax C
redi
t (LI
HTC
) inv
estm
ents
are
to b
e in
clud
ed in
Lin
e (2
7). T
here
mus
t be
an a
ll-in
clus
ive
guar
ante
e fr
om a
n A
RO
-rat
ed
entit
y th
at g
uara
ntee
s the
yie
ld o
n th
e in
vest
men
t.
Fede
ral N
on-G
uara
ntee
d LI
HTC
inve
stm
ents
with
the
follo
win
g ris
k m
itiga
tion
fact
ors a
re to
be
incl
uded
in L
ine
(28)
:
a)A
leve
l of l
ever
age
belo
w 5
0 pe
rcen
t. Fo
r a L
IHTC
Fun
d, th
e le
vel o
f lev
erag
e is
mea
sure
d at
the
fund
leve
l. b)
Ther
e is
a ta
x cr
edit
guar
ante
e ag
reem
ent f
rom
gen
eral
par
tner
or m
anag
ing
mem
ber.
This
agr
eem
ent r
equi
res
the
gene
ral p
artn
er o
r man
agin
g m
embe
r to
reim
burs
e in
vest
ors
for a
ny s
hortf
alls
in ta
x cr
edits
due
to e
rror
s of
com
plia
nce,
for t
he li
fe o
f the
par
tner
ship
. For
an
LIH
TC fu
nd, a
tax
cred
it gu
aran
tee
is
requ
ired
from
the
deve
lope
rs o
f the
low
er-ti
er L
IHTC
pro
perti
es to
the
uppe
r-tie
r par
tner
ship
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
10
10/2
0/20
17
Stat
e G
uara
ntee
d LI
HTC
inve
stm
ents
that
at a
min
imum
mee
t the
fede
ral r
equi
rem
ents
for g
uara
ntee
d LI
HTC
inve
stm
ents
are
to b
e in
clud
ed in
Lin
e (2
9).
Stat
e N
on-G
uara
ntee
d LI
HTC
inve
stm
ents
that
at a
min
imum
mee
t the
fede
ral r
equi
rem
ents
for n
on-g
uara
ntee
d LI
HTC
inve
stm
ents
are
to b
e in
clud
ed o
n Li
ne (3
0).
All
Oth
er L
IHTC
inve
stm
ents
, sta
te a
nd fe
dera
l LIH
TC in
vest
men
ts th
at d
o no
t mee
t the
requ
irem
ents
of L
ines
(27)
thro
ugh
(30)
wou
ld b
e re
porte
d on
Lin
e (3
1).
RE
PLIC
AT
ION
(SY
NT
HE
TIC
ASS
ET
) TR
AN
SAC
TIO
NS
AN
D M
AN
DA
TO
RY
C
ON
VE
RT
IBL
E S
EC
UR
ITIE
S X
R00
8
A re
plic
atio
n (s
ynth
etic
ass
et) t
rans
actio
n is
a d
eriv
ativ
e tra
nsac
tion
ente
red
into
in c
onju
nctio
n w
ith o
ther
inve
stm
ents
in o
rder
to re
prod
uce
the
inve
stm
ent c
hara
cter
istic
s of
oth
erw
ise
perm
issi
ble
inve
stm
ents
. A
der
ivat
ive
trans
actio
n en
tere
d in
to b
y an
ins
urer
as
a he
dgin
g or
inc
ome
gene
ratio
n tra
nsac
tion
shal
l no
t be
con
side
red
a re
plic
atio
n (s
ynth
etic
ass
et)
trans
actio
n. A
ll re
plic
atio
n tra
nsac
tions
mus
t be
revi
ewed
and
app
rove
d by
the
NA
IC C
apita
l Mar
kets
& I
nves
tmen
t Ana
lysi
s O
ffic
e an
d as
sign
ed a
n R
SAT
num
ber.
The
trans
actio
ns a
re d
iscl
osed
in S
ched
ule
DB
, Par
t C, S
ectio
n 1.
A re
plic
atio
n (s
ynth
etic
ass
et) t
rans
actio
n in
crea
ses
the
insu
rer’
s ex
posu
re to
one
type
of a
sset
, the
repl
icat
ed (s
ynth
etic
) ass
et, a
nd m
ay re
duce
the
insu
rer’
s ex
posu
re to
th
e as
set r
isk
asso
ciat
ed w
ith th
e ca
sh m
arke
t com
pone
nts o
f the
tran
sact
ion.
Bot
h ef
fect
s are
cap
ture
d an
d qu
antif
ied
in th
e w
orks
heet
for r
eplic
atio
n tra
nsac
tions
.
A m
anda
tory
con
verti
ble
secu
rity
is d
efin
ed a
s a
type
of
conv
ertib
le b
ond
that
has
a r
equi
red
conv
ersi
on o
r re
dem
ptio
n fe
atur
e. E
ither
on
or b
efor
e a
cont
ract
ual
conv
ersi
on d
ate,
the
hold
er m
ust c
onve
rt th
e m
anda
tory
con
verti
ble
secu
rity
into
the
unde
rlyin
g co
mm
on s
tock
. Man
dato
ry c
onve
rtibl
e se
curit
ies
are
subj
ect t
o sp
ecia
l re
porti
ng in
stru
ctio
ns a
nd a
re th
eref
ore
not a
ssig
ned
NA
IC D
esig
natio
ns o
r Uni
t Pric
es b
y th
e SV
O. T
he b
alan
ce s
heet
am
ount
for m
anda
tory
con
verti
ble
secu
ritie
s sh
all
be re
porte
d at
the
low
er o
f am
ortiz
ed c
ost o
r fai
r val
ue d
urin
g th
e pe
riod
prio
r to
conv
ersi
on. T
his
repo
rting
met
hod
is n
ot im
pact
ed b
y N
AIC
des
igna
tion
or in
form
atio
n re
ceiv
ed f
rom
cre
dit
ratin
g pr
ovid
ers
(CR
Ps).
Upo
n co
nver
sion
, th
ese
secu
ritie
s w
ill b
e su
bjec
t to
the
acc
ount
ing
guid
ance
of
the
SSA
P th
at r
efle
cts
thei
r re
vise
d ch
arac
teris
tics.
For f
urth
er g
uida
nce
rega
rdin
g m
anda
tory
con
verti
ble
secu
ritie
s re
fer t
o SS
AP N
o. 2
6—Bo
nds.
This
wor
kshe
et a
djus
ts th
e R
BC
requ
irem
ent u
pwar
d if
the
secu
rity
that
resu
lts fr
om th
e co
nver
sion
is m
ore
risky
than
the
orig
inal
secu
rity.
This
wor
kshe
et s
houl
d co
ntai
n a
line
for e
ach
repl
icat
ed (s
ynth
etic
) ass
et a
nd e
ach
cash
inst
rum
ent c
ompo
nent
of a
ll re
plic
atio
n (s
ynth
etic
ass
et) t
rans
actio
ns u
nder
take
n by
the
insu
rer.
It sh
ould
als
o co
ntai
n a
line
for e
ach
man
dato
ry c
onve
rtibl
e se
curit
y an
d a
line
for t
he s
ecur
ity th
at w
ill re
sult
from
the
conv
ersi
on. T
he a
sset
s sh
ould
be
sorte
d fir
st b
y th
e R
SAT
num
ber,
next
by
type
(rep
licat
ed a
sset
s fir
st, t
hen
cash
inst
rum
ents
, the
n m
anda
tory
con
verti
ble
secu
ritie
s, an
d th
e se
curit
y th
at re
sults
from
the
conv
ersi
on) a
nd fi
nally
by
CU
SIP.
Col
umn
(1):
The
RSA
T nu
mbe
r for
eac
h tra
nsac
tion
shou
ld b
e th
at u
sed
in S
ched
ule
DB
, Par
t C, S
ectio
n 1.
Lea
ve th
is c
olum
n bl
ank
for m
anda
tory
con
verti
ble
secu
ritie
s.
Col
umn
(2):
Ente
r an
R (f
or re
plic
ated
ass
et) i
f the
line
des
crib
es o
ne o
f the
repl
icat
ed (s
ynth
etic
) ass
ets,
a C
W (f
or c
ash
inst
rum
ent w
ith R
BC
cre
dit)
if th
e lin
e de
scrib
es
one
of th
e ca
sh in
stru
men
ts c
onst
itutin
g th
e tra
nsac
tion
and
the
trans
actio
n ei
ther
(1) i
s a
swap
of p
rosp
ectiv
ely
dete
rmin
ed in
tere
st ra
tes
or (2
) elim
inat
es th
e as
set r
isk
asso
ciat
ed w
ith th
e ca
sh in
stru
men
t, an
d a
CN
(for
cas
h in
stru
men
t with
no
RB
C c
redi
t) if
the
line
desc
ribes
one
of t
he c
ash
inst
rum
ents
con
stitu
ting
the
trans
actio
n an
d th
e tra
nsac
tion
does
not
elim
inat
e th
e in
sure
r’s
expo
sure
to th
e as
set r
isk
asso
ciat
ed w
ith th
e in
stru
men
t. En
ter a
n M
C fo
r a m
anda
tory
con
verti
ble
secu
rity
and
an M
CC
fo
r the
secu
rity
that
will
resu
lt fr
om th
e co
nver
sion
.
Col
umn
(3):
Show
the
CU
SIP
for
all c
ash
inst
rum
ents
that
are
sec
uriti
es a
nd a
ll m
anda
tory
con
verti
ble
secu
ritie
s an
d al
l sec
uriti
es th
at w
ill r
esul
t fro
m a
man
dato
ry
conv
ersi
on.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
11
10/2
0/20
17
Col
umn
(4):
Giv
e th
e de
scrip
tion
of t
he r
eplic
ated
(sy
nthe
tic)
asse
t(s)
or c
ash
inst
rum
ents
as
foun
d on
Sch
edul
e D
B, P
art
C, S
ectio
n 1.
Lea
ve b
lank
for
man
dato
ry
conv
ertib
le se
curit
ies.
Col
umn
(5):
Giv
e th
e N
AIC
des
igna
tion
or o
ther
des
crip
tion
that
will
bes
t id
entif
y th
e as
set
risk
of t
he a
sset
. For
rep
licat
ions
(sy
nthe
tic a
sset
s) t
his
is c
onta
ined
in
Col
umns
3 o
r 14
of S
ched
ule
DB
, Par
t C, S
ectio
n 1.
Col
umn
(6):
Giv
e th
e bo
ok/a
djus
ted
carr
ying
val
ue o
f th
e as
set.
For
repl
icat
ions
(sy
nthe
tic a
sset
s) th
is is
con
tain
ed in
Col
umns
5, 1
0 or
15
of S
ched
ule
DB
, Par
t C,
Sect
ion
1.
Col
umn
(7):
For r
eplic
ated
(syn
thet
ic) a
sset
s an
d fo
r the
sec
uriti
es th
at w
ill re
sult
from
the
conv
ersi
on o
f a m
anda
tory
con
verti
ble
secu
rity,
mul
tiply
the
risk-
base
d ca
pita
l fa
ctor
app
ropr
iate
to th
e as
set d
esig
natio
n of
the
asse
t tim
es th
e bo
ok/a
djus
ted
carr
ying
val
ue c
onta
ined
in C
olum
n (6
). Fo
r cas
h in
stru
men
t com
pone
nts t
hat q
ualif
y fo
r an
RB
C c
redi
t and
for m
anda
tory
con
verti
ble
secu
ritie
s, th
e am
ount
con
tain
ed in
this
col
umn
is th
e pr
oduc
t of:
(a)
The
risk-
base
d ca
pita
l fa
ctor
app
ropr
iate
to
the
asse
t de
sign
atio
n of
the
cas
h in
stru
men
t or
man
dato
ry c
onve
rtibl
e se
curit
y, b
ut n
ot h
ighe
r th
an t
he
aver
age
risk-
base
d ca
pita
l fac
tor
for
the
repl
icat
ed (
synt
hetic
) as
set(s
) or
the
secu
ritie
s th
at r
esul
t fro
m th
e co
nver
sion
of
the
man
dato
ry c
onve
rtibl
e se
curit
y, ti
mes
(b
)Th
e bo
ok/a
djus
ted
carr
ying
val
ue c
onta
ined
in C
olum
n 6,
tim
es
(c)
–1.
For o
ther
cas
h in
stru
men
t com
pone
nts,
this
col
umn
shou
ld c
onta
in a
zer
o. E
QU
ITY
ASS
ET
S X
R00
9U
naff
iliat
ed P
refe
rred
Sto
cks
Expe
rienc
e da
ta to
dev
elop
pre
ferr
ed s
tock
fact
ors
is n
ot re
adily
ava
ilabl
e; h
owev
er, i
t is
belie
ved
that
pre
ferr
ed s
tock
s ar
e so
mew
hat m
ore
likel
y to
def
ault
than
bon
ds.
The
loss
on
defa
ult w
ould
be
som
ewha
t hig
her t
han
that
exp
erie
nced
on
bond
s; h
owev
er, f
orm
ula
fact
ors a
re e
qual
to b
ond
fact
ors.
The
RB
C re
quire
men
ts fo
r una
ffili
ated
pre
ferr
ed s
tock
s an
d hy
brid
s ar
e ba
sed
on th
e N
AIC
des
igna
tion.
Col
umn
(1) a
mou
nts
are
from
Sch
edul
e D
, Par
t 2, S
ectio
n 1
not
incl
udin
g af
filia
ted
pref
erre
d st
ock.
The
pre
ferr
ed s
tock
s an
d hy
brid
s m
ust b
e br
oken
out
by
asse
t des
igna
tion
(NA
IC 0
1 th
roug
h N
AIC
06)
and
thes
e in
divi
dual
gro
ups
are
to b
e en
tere
d in
the
appr
opria
te li
nes.
The
tota
l am
ount
of u
naff
iliat
ed p
refe
rred
stoc
k an
d hy
brid
s rep
orte
d sh
ould
equ
al a
nnua
l sta
tem
ent P
age
2, C
olum
n 3,
Lin
e 2.
1,
less
any
aff
iliat
ed p
refe
rred
sto
ck in
Sch
edul
e D
Sum
mar
y by
Cou
ntry
, Col
umn
1, L
ine
18. T
he to
tal a
mou
nt o
f hyb
rid s
ecur
ities
repo
rted
shou
ld e
qual
ann
ual s
tate
men
t Sc
hedu
le D
, Par
t 1A
, Sec
tion
1, C
olum
n 7,
Lin
e 7.
7.
Una
ffili
ated
Com
mon
Sto
ck
Non
-gov
ernm
ent m
oney
mar
ket m
utua
l fun
ds a
re m
ore
like
cash
than
com
mon
sto
ck, t
here
fore
it is
app
ropr
iate
to u
se th
e sa
me
fact
or a
s fo
r cas
h. F
eder
al H
ome
Loan
B
ank
Stoc
k ha
s ch
arac
teris
tics
mor
e lik
e a
fixed
inco
me
inst
rum
ent r
athe
r tha
n co
mm
on s
tock
. A 2
.3 p
erce
nt fa
ctor
was
cho
sen.
The
fact
or fo
r oth
er u
naff
iliat
ed c
omm
on
stoc
k is
bas
ed o
n st
udie
s w
hich
indi
cate
that
a 1
0 pe
rcen
t to
12 p
erce
nt f
acto
r is
nee
ded
to p
rovi
de c
apita
l to
cove
r ap
prox
imat
ely
95 p
erce
nt o
f th
e gr
eate
st lo
sses
in
com
mon
sto
ck o
ver a
one
-yea
r fut
ure
perio
d. T
he h
ighe
r fac
tor o
f 15
perc
ent c
onta
ined
in th
e fo
rmul
a re
flect
s th
e in
crea
sed
risk
whe
n te
stin
g a
perio
d in
exc
ess
of o
ne
year
. Thi
s fac
tor a
ssum
es c
apita
l los
ses a
re u
nrea
lized
and
not
subj
ect t
o fa
vora
ble
tax
treat
men
t at t
he ti
me
of lo
ss in
mar
ket v
alue
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
12
10/2
0/20
17
ASS
ET
RIS
K –
PR
OPE
RT
Y &
EQ
UIP
ME
NT
X
R01
0
Ther
e ar
e fiv
e su
bcat
egor
ies
of “
Prop
erty
& E
quip
men
t A
sset
s”:
(1)
Prop
ertie
s O
ccup
ied
by t
he C
ompa
ny;
(2)
Prop
ertie
s H
eld
for
the
Prod
uctio
n of
Inc
ome;
(3)
Pr
oper
ties H
eld
for S
ale;
(4) F
urni
ture
and
Equ
ipm
ent;
and
(5) E
DP
Equi
pmen
t and
Sof
twar
e.
Encu
mbr
ance
s hav
e be
en in
clud
ed in
the
real
est
ate
base
s sin
ce th
e va
lue
of th
e pr
oper
ty su
bjec
t to
loss
wou
ld in
clud
e en
cum
bran
ces.
Cla
ssify
Fur
nitu
re a
nd E
quip
men
t int
o: (1
) the
por
tion
used
to d
eliv
er h
ealth
car
e th
at is
sub
ject
to s
tatu
tory
acc
ount
ing
depr
ecia
tion
limits
; and
(2) a
ll ot
her.
Cat
egor
y (1
) sh
ould
inc
lude
onl
y th
at f
urni
ture
and
equ
ipm
ent
whi
ch h
as h
ad i
ts d
epre
ciat
ion
perio
d lim
ited
to n
o m
ore
than
thr
ee y
ears
pur
suan
t to
SSA
P N
o. 7
3—H
ealth
Car
e D
eliv
ery
Asse
ts an
d Le
aseh
old
Impr
ovem
ents
in H
ealth
Car
e Fa
cilit
ies.
Cat
egor
y (2
) sh
ould
incl
ude
all o
ther
furn
iture
and
equ
ipm
ent,
or th
at f
urni
ture
and
equ
ipm
ent
who
se d
epre
ciat
ion
perio
ds a
re n
ot li
mite
d by
SSA
P No
. 73—
Hea
lth C
are
Del
iver
y As
sets
and
Lea
seho
ld Im
prov
emen
ts in
Hea
lth C
are
Faci
litie
s, i.e
., th
e de
prec
iatio
n pe
riod
is b
ased
on
usef
ul li
fe. I
f th
e fil
ing
entit
y’s
state
of
dom
icile
has
a p
erm
itted
pra
ctic
e th
at p
reem
pts
SSAP
No.
73—
Hea
lth C
are
Del
iver
y As
sets
and
Lea
seho
ld
Impr
ovem
ents
in H
ealth
Car
e Fa
cilit
ies,
all f
urni
ture
and
equ
ipm
ent s
houl
d be
cla
ssifi
ed in
Cat
egor
y (2
).
ASS
ET
CO
NC
EN
TR
AT
ION
X
R01
1
The
purp
ose
of th
e as
set c
once
ntra
tion
calc
ulat
ion
is to
refle
ct th
e ad
ditio
nal r
isk
of h
igh
conc
entra
tions
of c
erta
in ty
pes o
f ass
ets i
n si
ngle
exp
osur
es, t
erm
ed “
issu
ers.”
An
issu
er is
a s
ingl
e en
tity,
suc
h as
IBM
or t
he F
ord
Mot
or C
ompa
ny. W
hen
the
repo
rting
ent
ity h
as a
larg
e po
rtion
of i
ts a
sset
por
tfolio
con
cent
rate
d in
onl
y a
few
issu
ers,
ther
e is
a h
eigh
tene
d ris
k of
inso
lven
cy if
one
of
thos
e is
suer
s sh
ould
def
ault.
An
issu
er m
ay b
e re
pres
ente
d in
the
repo
rting
ent
ity’s
inve
stm
ent p
ortfo
lio b
y a
sing
le
secu
rity
desi
gnat
ion,
suc
h as
a la
rge
bloc
k of
NA
IC 0
2 bo
nds,
or a
com
bina
tion
of v
ario
us s
ecur
ities
, suc
h as
com
mon
sto
cks,
pref
erre
d st
ocks
, and
bon
ds. T
he a
dditi
onal
R
BC
for a
sset
con
cent
ratio
n is
app
lied
to th
e te
n la
rges
t iss
uers
.
Con
cent
rate
d in
vest
men
ts in
cer
tain
type
s of
ass
ets
are
not e
xpec
ted
to re
pres
ent a
n ad
ditio
nal r
isk
over
and
abo
ve th
e ge
nera
l ris
k of
the
asse
t its
elf.
Ther
efor
e, p
rior t
o de
term
inin
g th
e te
n la
rges
t iss
uers
, you
sho
uld
excl
ude
thos
e as
sets
that
are
exe
mpt
from
the
asse
t con
cent
ratio
n fa
ctor
. Ass
et ty
pes
that
are
exc
lude
d fr
om th
e ca
lcul
atio
n in
clud
e: N
AIC
06
bond
s an
d pr
efer
red
stoc
k; a
ffili
ated
com
mon
sto
ck; a
ffili
ated
pre
ferr
ed s
tock
; aff
iliat
ed b
onds
; pro
perty
and
equ
ipm
ent;
U.S
. gov
ernm
ent g
uara
ntee
d bo
nds;
NA
IC 0
1 bo
nds,
pref
erre
d st
ock
and
hybr
ids;
any
oth
er a
sset
cat
egor
ies
with
ris
k-ba
sed
capi
tal f
acto
rs le
ss th
an 1
per
cent
,and
inve
stm
ent c
ompa
nies
(m
utua
l fu
nds)
and
com
mon
trus
t fun
ds th
at a
re d
iver
sifie
d w
ithin
the
mea
ning
of t
he fe
dera
l Inv
estm
ent C
ompa
ny A
ct o
f 194
0 [S
ectio
n 5(
b) (1
)]. T
he p
ro ra
ta sh
are
of in
divi
dual
se
curit
ies
with
in a
n in
vest
men
t co
mpa
ny (
mut
ual
fund
) or
com
mon
tru
st f
und
are
to b
e in
clud
ed i
n th
e de
term
inat
ion
of c
once
ntra
ted
inve
stm
ents
, su
bjec
t to
the
ex
clus
ions
iden
tifie
d.
With
res
pect
to
inve
stm
ent
com
pani
es (
mut
ual
fund
s) a
nd c
omm
on t
rust
fun
ds, t
he r
epor
ting
entit
y is
res
pons
ible
for
mai
ntai
ning
the
app
ropr
iate
doc
umen
tatio
n as
ev
iden
ce th
at su
ch is
div
ersi
fied
with
in th
e m
eani
ng o
f the
fede
ral I
nves
tmen
t Com
pany
Act
and
pro
vidi
ng th
is in
form
atio
n up
on re
ques
t of t
he C
omm
issi
oner
, Dire
ctor
or
Supe
rinte
nden
t of
the
Dep
artm
ent
of I
nsur
ance
. Th
e re
porti
ng e
ntity
is
also
res
pons
ible
for
mai
ntai
ning
a l
istin
g of
the
ind
ivid
ual
secu
ritie
s an
d co
rres
pond
ing
book
/adj
uste
d ca
rryi
ng v
alue
s mak
ing
up it
s inv
estm
ent c
ompa
nies
(mut
ual f
unds
) and
com
mon
trus
t fun
ds p
ortfo
lio, i
n or
der t
o de
term
ine
whe
ther
a c
once
ntra
tion
char
ge
is n
eces
sary
. Thi
s inf
orm
atio
n sh
ould
be
prov
ided
to th
e C
omm
issi
oner
, Dire
ctor
or S
uper
inte
nden
t upo
n re
ques
t.
© 1
998-
2017
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iona
l Ass
ocia
tion
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nce
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ers
13
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17
The
asse
ts th
at A
RE
INC
LU
DE
D in
the
calc
ulat
ion
whe
n de
term
inin
g th
e 10
larg
est i
ssue
rs a
re a
s fol
low
s:
NA
IC 0
2 U
naff
iliat
ed B
onds
N
AIC
03
Una
ffili
ated
Bon
ds
NA
IC 0
4 U
naff
iliat
ed B
onds
N
AIC
05
Una
ffili
ated
Bon
ds
Col
late
ral L
oans
M
ortg
age
Loan
s N
AIC
02
Una
ffili
ated
Pre
ferr
ed S
tock
N
AIC
03
Una
ffili
ated
Pre
ferr
ed S
tock
N
AIC
04
Una
ffili
ated
Pre
ferr
ed S
tock
N
AIC
05
Una
ffili
ated
Pre
ferr
ed S
tock
N
AIC
02
Hyb
rids
NA
IC 0
3 H
ybrid
s N
AIC
04
Hyb
rids
NA
IC 0
5 H
ybrid
s O
ther
Lon
g-Te
rm A
sset
s N
AIC
02
Wor
king
Cap
ital F
inan
ce In
vest
men
ts
Fede
ral G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts
Fede
ral N
on-G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts
Stat
e G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts
Stat
e N
on-G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts
All
Oth
er L
ow In
com
e H
ousi
ng T
ax C
redi
ts
Una
ffili
ated
Com
mon
Sto
ck
The
conc
entra
tion
fact
or b
asic
ally
dou
bles
the
risk-
base
d ca
pita
l fac
tor
(up
to a
max
imum
of
30 p
erce
nt)
for
asse
ts h
eld
in th
e 10
larg
est i
ssue
rs. S
ince
the
risk-
base
d ca
pita
l of t
he a
sset
s in
clud
ed in
the
conc
entra
tion
fact
or h
as a
lread
y be
en c
ount
ed o
nce
in th
e ba
sic
form
ula,
this
fact
or it
self
only
ser
ves
to a
dd a
n ad
ditio
nal r
isk-
base
d ca
pita
l req
uire
men
t on
thes
e as
sets
.
The
nam
e of
eac
h of
the
larg
est 1
0 is
suer
s is
ent
ered
at t
he to
p of
the
tabl
e an
d th
e ap
prop
riate
sta
tem
ent a
mou
nts
are
ente
red
in C
olum
n (2
), Li
nes
(1)
thro
ugh
(22)
. A
ggre
gate
all
sim
ilar
asse
t typ
es b
efor
e en
terin
g th
e am
ount
in C
olum
n (2
). To
det
erm
ine
the
10 la
rges
t iss
uers
, firs
t poo
l all
of th
e as
sets
sub
ject
to th
e co
ncen
tratio
n fa
ctor
. Fro
m th
is p
ool,
aggr
egat
e th
e va
rious
secu
ritie
s by
issu
er. T
he a
ggre
gate
boo
k/ad
just
ed c
arry
ing
valu
es fo
r the
ass
ets a
re c
ompu
ted,
and
the
10 la
rges
t are
subj
ect t
o th
e co
ncen
tratio
n fa
ctor
. For
exa
mpl
e, a
n or
gani
zatio
n m
ight
ow
n $1
0,00
0,00
0 in
NA
IC 0
2 bo
nds
of IB
M p
lus
$5,0
00,0
00 o
f com
mon
sto
ck. T
he to
tal i
nves
tmen
t in
that
is
suer
is
$15,
000,
000.
If
that
is
the
larg
est
issu
er, t
hen
the
iden
tifie
r (“
IBM
Cor
pora
tion”
) w
ould
be
ente
red
in t
he s
pace
allo
wed
for
the
firs
t Is
suer
Nam
e, a
nd t
he
$10,
000,
000
wou
ld b
e en
tere
d un
der t
he b
ook/
adju
sted
car
ryin
g va
lue
colu
mn
for L
ine
(1) (
NA
IC 0
2 un
affil
iate
d bo
nds)
and
the
$5,0
00,0
00 w
ould
be
ente
red
on L
ine
(22)
(una
ffili
ated
com
mon
stoc
k).
Rep
licat
ed a
sset
s oth
er th
an sy
nthe
tical
ly c
reat
ed in
dice
s sho
uld
be in
clud
ed in
the
asse
t con
cent
ratio
n ca
lcul
atio
n in
the
sam
e m
anne
r as o
ther
ass
ets.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
14
10/2
0/20
17
UN
DE
RW
RIT
ING
RIS
K -
L(1
) TH
RO
UG
H L
(18)
X
R01
2
Und
erw
ritin
g R
isk
is th
e la
rges
t por
tion
of th
e ris
k-ba
sed
capi
tal c
harg
e fo
r mos
t rep
ortin
g en
titie
s. Th
e U
nder
writ
ing
Ris
k pa
ge g
ener
ates
the
RB
C re
quire
men
t for
the
risk
of fl
uctu
atio
ns in
und
erw
ritin
g ex
perie
nce.
The
cre
dit t
hat i
s allo
wed
for m
anag
ed c
are
in th
is p
age
com
es fr
om th
e M
anag
ed C
are
Cre
dit C
alcu
latio
n pa
ge.
Und
erw
ritin
g ris
k is
pre
sent
whe
n th
e ne
xt d
olla
r of u
nexp
ecte
d cl
aim
pay
men
ts c
omes
dire
ctly
out
of t
he re
porti
ng e
ntity
’s c
apita
l and
sur
plus
. It r
epre
sent
s th
e ris
k th
at
the
porti
on o
f pre
miu
ms
inte
nded
to c
over
med
ical
exp
ense
s w
ill b
e in
suff
icie
nt to
pay
suc
h ex
pens
e. F
or e
xam
ple,
a re
porti
ng e
ntity
may
cha
rge
an in
divi
dual
$10
0 in
pr
emiu
m in
exc
hang
e fo
r a g
uara
nty
that
all
med
ical
cos
ts w
ill b
e pa
id b
y th
at re
porti
ng e
ntity
. If t
he in
divi
dual
incu
rs $
101
in c
laim
s co
sts,
the
repo
rting
ent
ity’s
sur
plus
w
ill d
eclin
e be
caus
e it
did
not c
harg
e a
suff
icie
nt p
rem
ium
to p
ick
up th
e ad
ditio
nal r
isk
for t
hat i
ndiv
idua
l.
Ther
e ar
e ot
her a
rran
gem
ents
whe
re th
e re
porti
ng e
ntity
is n
ot a
t ris
k fo
r exc
essi
ve c
laim
s pa
ymen
ts, s
uch
as w
hen
an H
MO
agr
ees
to s
erve
as
a th
ird-p
arty
adm
inis
trato
r fo
r a se
lf-in
sure
d em
ploy
er. T
he se
lf-in
sure
d em
ploy
er p
ays f
or a
ctua
l cla
im c
osts
, so
the
risk
of e
xces
sive
cla
ims e
xper
ienc
e is
bor
ne b
y th
e se
lf-in
sure
d em
ploy
er, n
ot th
e re
porti
ng e
ntity
. The
und
erw
ritin
g ris
k se
ctio
n of
the
form
ula,
ther
efor
e, re
quire
s som
e ad
just
men
ts to
rem
ove
non-
unde
rwrit
ing
risk
busi
ness
(bot
h pr
emiu
ms a
nd c
laim
s)
befo
re th
e R
BC
requ
irem
ent i
s ca
lcul
ated
. App
endi
x 1
cont
ains
com
mon
ly u
sed
term
s fo
r gen
eral
type
s of
hea
lth in
sura
nce.
App
endi
x 2
cont
ains
term
s sp
ecifi
cally
use
d w
ith re
spec
t to
Med
icar
e Pa
rt D
cov
erag
e of
pre
scrip
tion
drug
s.
Cla
ims E
xper
ienc
e Fl
uctu
atio
n Th
e R
BC
requ
irem
ent f
or c
laim
s exp
erie
nce
fluct
uatio
n is
bas
ed o
n th
e gr
eate
r of t
he fo
llow
ing
calc
ulat
ions
:
A. U
nder
writ
ing
risk
reve
nue,
tim
es th
e un
derw
ritin
g ris
k cl
aim
s ra
tio, t
imes
a s
et o
f tie
red
fact
ors.
The
tiere
d fa
ctor
s ar
e de
term
ined
by
the
unde
rwrit
ing
risk
reve
nue
volu
me.
or
B. A
n al
tern
ativ
e ris
k ch
arge
tha
t ad
dres
ses
the
risk
of c
atas
troph
ic c
laim
s on
any
sin
gle
indi
vidu
al. T
he a
ltern
ativ
e ris
k ch
arge
is
equa
l to
mul
tiple
of
the
max
imum
ret
aine
d ris
k on
any
sin
gle
indi
vidu
al in
a c
laim
s ye
ar. T
he m
axim
um r
etai
ned
risk
(leve
l of
pote
ntia
l cla
im e
xpos
ure)
is c
appe
d at
$75
0,00
0 pe
r in
divi
dual
and
$1,
500,
000
tota
l for
med
ical
cov
erag
e; $
25,0
00 p
er in
divi
dual
and
$50
,000
tota
l for
all
othe
r co
vera
ge e
xcep
t Med
icar
e Pa
rt D
cov
erag
e an
d $2
5,00
0 pe
r ind
ivid
ual a
nd $
150,
000
tota
l for
Med
icar
e Pa
rt D
cov
erag
e. A
dditi
onal
ly, f
or m
ulti-
line
orga
niza
tions
(e.g
., w
ritin
g m
ore
than
one
cov
erag
e ty
pe),
the
alte
rnat
ive
risk
char
ge f
or e
ach
subs
eque
nt li
ne o
f bu
sine
ss is
red
uced
by
the
amou
nt o
f th
e hi
ghes
t cap
. For
exa
mpl
e, if
an
orga
niza
tion
is w
ritin
g bo
th
com
preh
ensi
ve m
edic
al (w
ith a
cap
of $
1,50
0,00
0) a
nd d
enta
l (w
ith a
cap
of $
50,0
00),
then
onl
y th
e la
rger
alte
rnat
ive
risk
char
ge is
con
side
red
whe
n ca
lcul
atin
g th
e R
BC
requ
irem
ent (
i.e.,
the
alte
rnat
ive
risk
char
ges f
or e
ach
line
of b
usin
ess a
re n
ot c
umul
ativ
e).
For
RB
C r
epor
ts to
be
filed
by
a he
alth
org
aniz
atio
n co
mm
enci
ng o
pera
tions
in th
is r
epor
ting
year
, the
hea
lth o
rgan
izat
ion
shal
l est
imat
e th
e in
itial
RB
C le
vels
usi
ng
oper
atin
g (r
even
ue a
nd e
xpen
se)
proj
ectio
ns (
cons
ider
ing
man
aged
car
e ar
rang
emen
ts)
for
its f
irst f
ull y
ear
(12
mon
ths)
of
man
aged
car
e op
erat
ions
. The
pro
ject
ions
, in
clud
ing
the
risk-
base
d ca
pita
l req
uire
men
t, sh
ould
be
the
sam
e as
thos
e fil
ed a
s pa
rt of
a c
ompr
ehen
sive
bus
ines
s pl
an th
at is
sub
mitt
ed a
s pa
rt of
the
appl
icat
ion
for
licen
sure
. The
Und
erw
ritin
g, C
redi
t (ca
pita
tion
risk
only
), an
d B
usin
ess R
isk
sect
ions
of t
he fi
rst R
BC
repo
rt su
bmitt
ed sh
all b
e co
mpl
eted
usi
ng th
e he
alth
org
aniz
atio
n’s
actu
al o
pera
ting
data
for t
he p
erio
d fr
om th
e co
mm
ence
men
t of o
pera
tions
unt
il ye
ar-e
nd, p
lus
proj
ectio
ns fo
r the
num
ber o
f mon
ths
nece
ssar
y to
pro
vide
12
mon
ths
of
data
. The
aff
iliat
e, a
sset
and
por
tions
of
the
cred
it ris
k se
ctio
n th
at a
re b
ased
on
bala
nce
shee
t inf
orm
atio
n sh
all b
e re
porte
d us
ing
actu
al d
ata.
For
sub
sequ
ent y
ears
’ re
ports
, the
RB
C re
sults
for a
ll of
the
form
ula
com
pone
nts s
hall
be c
alcu
late
d us
ing
actu
al d
ata.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
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mis
sion
ers
15
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17
L(1
) thr
ough
L(1
8)
Ther
e ar
e si
x lin
es o
f bus
ines
s us
ed in
the
form
ula
for c
alcu
latin
g th
e R
BC
requ
irem
ent f
or th
is ri
sk: (
1) C
ompr
ehen
sive
Med
ical
and
Hos
pita
l; (2
) Med
icar
e Su
pple
men
t; (3
) Den
tal/V
isio
n; (4
) Sta
nd-A
lone
Med
icar
e Pa
rt D
Cov
erag
e; a
nd (5
) Oth
er H
ealth
; and
(6) O
ther
Non
-Hea
lth. E
ach
of th
ese
lines
of b
usin
ess h
as it
s ow
n co
lum
n in
the
Und
erw
ritin
g R
isk
– Ex
perie
nce
Fluc
tuat
ion
Ris
k ta
ble.
The
cat
egor
ies
liste
d in
the
colu
mns
of t
his
page
incl
ude
all r
isk
reve
nue
and
risk
reve
nue
that
is re
ceiv
ed fr
om
anot
her r
epor
ting
entit
y in
exc
hang
e fo
r med
ical
serv
ices
pro
vide
d to
its m
embe
rs. T
he d
escr
iptio
ns o
f the
item
s are
des
crib
ed a
s fol
low
s:
Col
umn
(1)
- C
ompr
ehen
sive
Med
ical
& H
ospi
tal.
Incl
udes
pol
icie
s pr
ovid
ing
for
med
ical
cov
erag
es in
clud
ing
hosp
ital,
surg
ical
, maj
or m
edic
al,
Med
icar
e ris
k co
vera
ge (
but
NO
T M
edic
are
Supp
lem
ent),
and
Med
icai
d ris
k co
vera
ge.
This
cat
egor
y D
OES
NO
T in
clud
e ad
min
istra
tive
serv
ices
co
ntra
cts
(ASC
), ad
min
istra
tive
serv
ices
onl
y (A
SO)
cont
ract
s, or
any
non
-und
erw
ritte
n bu
sine
ss. T
hese
pro
gram
s ar
e re
porte
d in
the
Bus
ines
s R
isk
sect
ion
of th
e fo
rmul
a. N
eith
er d
oes
it in
clud
e Fe
dera
l Em
ploy
ees
Hea
lth B
enef
it Pl
an (
FEH
BP)
or
TRIC
AR
E, w
hich
are
han
dled
in L
ine
21 o
f th
is
sect
ion.
The
alte
rnat
ive
risk
char
ge, w
hich
is tw
ice
the
max
imum
ret
aine
d ris
k af
ter
rein
sura
nce
on a
ny s
ingl
e in
divi
dual
, can
not e
xcee
d $1
,500
,000
. Pr
escr
iptio
n dr
ug b
enef
its in
clud
ed in
maj
or m
edic
al in
sura
nce
plan
s (in
clud
ing
Med
icar
e A
dvan
tage
pla
ns w
ith p
resc
riptio
n dr
ug c
over
age)
sho
uld
be
repo
rted
in th
is li
ne. T
hese
ben
efits
shou
ld a
lso
be in
clud
ed in
the
Man
aged
Car
e C
redi
t cal
cula
tion.
Col
umn
(2) -
Med
icar
e Su
pple
men
t. Th
is is
bus
ines
s re
porte
d in
the
Med
icar
e Su
pple
men
t Ins
uran
ce E
xper
ienc
e Ex
hibi
t of t
he a
nnua
l sta
tem
ent a
nd
incl
udes
Med
icar
e Se
lect
. Med
icar
e ris
k bu
sine
ss is
repo
rted
unde
r com
preh
ensi
ve m
edic
al a
nd h
ospi
tal.
Col
umn
(3) -
Den
tal &
Vis
ion.
Thi
s is
lim
ited
to p
olic
ies
prov
idin
g fo
r den
tal-o
nly
or v
isio
n-on
ly c
over
age
issu
ed a
s a
stan
d-al
one
polic
y or
as
a rid
er
to a
med
ical
pol
icy,
whi
ch is
not
rela
ted
to th
e m
edic
al p
olic
y th
roug
h de
duct
ible
s or o
ut-o
f-po
cket
lim
its.
Col
umn
(4)
- St
and-
Alo
neM
edic
are
Part
D C
over
age.
Thi
s in
clud
es b
oth
indi
vidu
al c
over
age
and
grou
p co
vera
ge o
f M
edic
are
Part
D c
over
age
whe
re th
e pl
an s
pons
or h
as r
isk
corr
idor
pro
tect
ion.
See
App
endi
x 2
for
defin
ition
of
thes
e te
rms.
Med
icar
e dr
ug b
enef
its in
clud
ed in
maj
or m
edic
al
plan
s or b
enef
its th
at d
o no
t mee
t the
abo
ve c
riter
ia a
re n
ot to
be
incl
uded
in th
is li
ne. S
uppl
emen
tal b
enef
its w
ithin
Med
icar
e Pa
rt D
(ben
efits
in e
xces
s of
the
stan
dard
ben
efit
desi
gn)
are
addr
esse
d se
para
tely
on
page
XR
014.
Em
ploy
er-b
ased
Par
t D c
over
age
that
is in
an
unin
sure
d pl
an a
s de
fined
in
SSAP
No.
47—
Uni
nsur
ed P
lans
is n
ot to
be
incl
uded
her
e.
Col
umn
(5)
– O
ther
Hea
lth C
over
ages
. Th
is i
nclu
des
othe
r he
alth
cov
erag
es s
uch
as o
ther
sta
nd-a
lone
pre
scrip
tion
drug
ben
efit
plan
s, N
OT
INC
LUD
ED
AB
OV
E th
at h
ave
not b
een
spec
ifica
lly a
ddre
ssed
in th
e ot
her c
olum
ns li
sted
abo
ve.
Col
umn
(6) -
Oth
er N
on-H
ealth
Cov
erag
es. T
his i
nclu
des l
ife a
nd p
rope
rty a
nd c
asua
lty c
over
ages
.
The
follo
win
g pa
ragr
aphs
exp
lain
the
mea
ning
of e
ach
line
of th
e ta
ble
for c
ompu
ting
the
expe
rienc
e flu
ctua
tion
unde
rwrit
ing
risk
RB
C.
Line
(1) P
rem
ium
.Thi
s is
the
amou
nt o
f mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
for t
he s
peci
fied
bene
fit p
lan.
It is
the
earn
ed a
mou
nt o
f pre
paym
ents
(usu
ally
on
a pe
r m
embe
r per
mon
th b
asis
) mad
e by
a c
over
ed g
roup
or i
ndiv
idua
l to
the
repo
rting
ent
ity in
exc
hang
e fo
r ser
vice
s to
be p
rovi
ded
or o
ffer
ed b
y su
ch o
rgan
izat
ion.
How
ever
, it
does
not
incl
ude
rece
ipts
und
er a
dmin
istra
tive
serv
ices
onl
y (A
SO) c
ontra
cts;
or a
dmin
istra
tive
serv
ices
con
tract
s (A
SC);
or a
ny n
on-u
nder
writ
ten
busi
ness
. Nor
doe
s it
incl
ude
fede
ral e
mpl
oyee
s he
alth
ben
efit
prog
ram
s (F
EHB
P) a
nd T
RIC
AR
E. R
epor
t pre
miu
m n
et o
f pay
men
ts fo
r sto
p-lo
ss o
r oth
er re
insu
ranc
e. T
he a
mou
nts r
epor
ted
in
the
indi
vidu
al c
olum
ns sh
ould
com
e di
rect
ly fr
om A
naly
sis o
f Ope
ratio
ns b
y Li
nes o
f Bus
ines
s, Pa
ge 7
, Lin
es 1
and
2 of
the
annu
al st
atem
ent.
For S
tand
-Alo
ne M
edic
are
Part
D C
over
age
the
prem
ium
inc
lude
s be
nefic
iary
pre
miu
m (
stan
dard
cov
erag
e po
rtion
), di
rect
sub
sidy
, lo
w-in
com
e su
bsid
y (p
rem
ium
por
tion)
, Pa
rt D
pay
men
t de
mon
stra
tion
amou
nts
and
risk
corr
idor
pay
men
t ad
just
men
ts.
See
App
endi
x 2
for
defin
ition
of
thes
e te
rms.
It do
es n
ot i
nclu
de r
even
ue r
ecei
ved
for
rein
sura
nce
paym
ents
or
low
-inco
me
subs
idy
(cos
t-sha
ring
porti
on),
whi
ch a
re c
onsi
dere
d fu
nds
rece
ived
for
uni
nsur
ed p
lans
in
acco
rdan
ce w
ith E
mer
ging
Acc
ount
ing
Issu
es
Wor
king
Gro
up (E
AIW
G) I
NT.
No.
05-
05. B
enef
icia
ry p
rem
ium
(sup
plem
enta
l ben
efit
porti
on) i
s rep
orte
d as
sepa
rate
pre
miu
m in
Lin
e (2
2.1)
of X
R01
4.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
16
10/2
0/20
17
NO
TE
: Whe
re p
rem
ium
s ar
e pa
id o
n a
mon
thly
bas
is, t
hey
are
gene
rally
fully
ear
ned
at th
e en
d of
the
mon
th fo
r whi
ch c
over
age
is p
rovi
ded.
In c
ases
w
here
the
mod
e of
pay
men
t is l
ess f
requ
ent t
han
mon
thly
, a p
ortio
n of
the
prem
ium
pay
men
t will
be
unea
rned
at t
he e
nd o
f any
giv
en re
porti
ng p
erio
d.
Line
(2) T
itle
XV
III M
edic
are.
Thi
s is
the
earn
ed a
mou
nt o
f mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
(net
of r
eins
uran
ce) f
or M
edic
are
risk
busi
ness
whe
re th
e re
porti
ng
entit
y, f
or a
fee
, agr
ees
to c
over
the
ful
l m
edic
al c
osts
of
Med
icar
e su
bscr
iber
s. Th
is i
nclu
des
the
bene
ficia
ry p
rem
ium
and
fed
eral
gov
ernm
ent’s
dire
ct s
ubsi
dy f
or
pres
crip
tion
drug
cov
erag
e un
der
MA
-PD
pla
ns. T
he to
tal o
f th
is li
ne w
ill ti
e to
the
Ana
lysi
s of
Ope
ratio
ns b
y Li
nes
of B
usin
ess,
Page
7, L
ines
1 a
nd 2
of
the
annu
al
stat
emen
t.
Line
(3) T
itle
XIX
Med
icai
d. T
his i
s the
ear
ned
amou
nt o
f mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
for M
edic
aid
risk
busi
ness
whe
re th
e re
porti
ng e
ntity
, for
a fe
e, a
gree
s to
cove
r the
full
med
ical
cos
ts o
f Med
icai
d su
bscr
iber
s. Th
e to
tal o
f thi
s lin
e w
ill ti
e to
the
Ana
lysi
s of
Ope
ratio
ns b
y Li
nes
of B
usin
ess,
Page
7, L
ines
1 a
nd 2
of t
he a
nnua
l st
atem
ent.
Sta
nd-A
lone
Med
icar
e Pa
rt D
cov
erag
e of
low
-inco
me
enro
llees
is n
ot in
clud
ed in
this
line
.
Line
(4) O
ther
Hea
lth R
isk
Rev
enue
. Thi
s is
ear
ned
amou
nts
char
ged
by th
e re
porti
ng e
ntity
as
a pr
ovid
er o
r int
erm
edia
ry fo
r spe
cifie
d m
edic
al (e
.g.,
full
prof
essi
onal
, de
ntal
, rad
iolo
gy, e
tc.)
serv
ices
pro
vide
d to
the
polic
yhol
ders
, or
mem
bers
of
anot
her i
nsur
er o
r hea
lth e
ntity
. Unl
ike
prem
ium
s, w
hich
are
col
lect
ed f
rom
an
empl
oyer
gr
oup
or i
ndiv
idua
l m
embe
r, ris
k re
venu
e is
the
pre
paid
(us
ually
on
a ca
pita
ted
basi
s) p
aym
ents
, mad
e by
ano
ther
ins
urer
or
heal
th e
ntity
to
the
repo
rting
ent
ity i
n ex
chan
ge f
or s
ervi
ces
to b
e pr
ovid
ed o
r of
fere
d by
suc
h or
gani
zatio
n. P
aym
ents
to p
rovi
ders
und
er r
isk
reve
nue
arra
ngem
ents
are
incl
uded
in th
e R
BC
cal
cula
tion
as
unde
rwrit
ing
risk
reve
nue
and
are
incl
uded
in th
e ca
lcul
atio
n of
man
aged
car
e cr
edits
. Exc
lude
fee
-for
-ser
vice
rev
enue
rec
eive
d by
the
repo
rting
ent
ity f
rom
ano
ther
re
porti
ng e
ntity
. Thi
s rev
enue
is re
porte
d in
the
Bus
ines
s Ris
k se
ctio
n of
the
form
ula
as n
on-u
nder
writ
ten
and
limite
d ris
k re
venu
e. T
he a
mou
nts r
epor
ted
in th
e in
divi
dual
co
lum
ns w
ill c
ome
dire
ctly
from
Pag
e 7,
Lin
e 4
of th
e an
nual
stat
emen
t.
Line
(5) U
nder
writ
ing
Ris
k R
even
ue. T
he su
m o
f Lin
es (1
) thr
ough
(4).
Line
(6) N
et In
curr
ed C
laim
s.C
laim
s in
curr
ed (p
aid
clai
ms
+ ch
ange
in u
npai
d cl
aim
s) d
urin
g th
e re
porti
ng y
ear (
net o
f rei
nsur
ance
) tha
t are
arr
ange
d fo
r or p
rovi
ded
by
the
repo
rting
ent
ity. P
aid
clai
ms i
nclu
de c
apita
tion
and
all o
ther
pay
men
ts to
pro
vide
rs fo
r ser
vice
s to
mem
bers
of t
he re
porti
ng e
ntity
, as w
ell a
s rei
mbu
rsem
ent d
irect
ly to
m
embe
rs fo
r cov
ered
serv
ices
. Pai
d cl
aim
s al
so in
clud
e sa
larie
s pai
d to
repo
rting
ent
ity e
mpl
oyee
s tha
t pro
vide
med
ical
serv
ices
to m
embe
rs a
nd re
late
d ex
pens
es. D
o no
t in
clud
e A
SC p
aym
ents
or
fede
ral
empl
oyee
s he
alth
ben
efit
prog
ram
(FE
HB
P) a
nd T
RIC
AR
E cl
aim
s. Th
ese
amou
nts
are
foun
d on
Pag
e 7,
Lin
e 17
of
the
annu
al
stat
emen
t.
For
Stan
d-A
lone
Med
icar
e Pa
rt D
Cov
erag
e, n
et in
curr
ed c
laim
s sh
ould
ref
lect
cla
ims
net o
f re
insu
ranc
e co
vera
ge (
as d
efin
ed in
App
endi
x 2)
. Whe
re th
ere
has
been
pr
epay
men
t und
er th
e re
insu
ranc
e co
vera
ge, p
aid
clai
ms
shou
ld b
e of
fset
from
the
cum
ulat
ive
depo
sits
. Unp
aid
clai
ms
liabi
litie
s sh
ould
refle
ct e
xpec
ted
reco
verie
s fr
om
the
rein
sura
nce
cove
rage
, for
cla
ims
unpa
id b
y th
e PD
P or
for a
mou
nts
cove
red
unde
r the
rein
sura
nce
cove
rage
that
exc
eed
the
cum
ulat
ive
depo
sits
. Whe
re th
ere
has
not
been
any
pre
paym
ent u
nder
the
rein
sura
nce
cove
rage
, unp
aid
clai
m li
abili
ties s
houl
d re
flect
exp
ecte
d am
ount
s stil
l due
from
CM
S.
Line
(7)
Fee
-for
-Ser
vice
Off
set.
Rep
ort f
ee f
or s
ervi
ce r
even
ue th
at is
dire
ctly
rel
ated
to m
edic
al e
xpen
se p
aym
ents
. The
fee
for
ser
vice
line
doe
s no
t inc
lude
rev
enue
w
here
ther
e is
no
asso
ciat
ed c
laim
pay
men
t (e.
g., f
ees
from
non
-mem
ber p
atie
nts
whe
re th
e pr
ovid
er re
ceiv
es n
o ad
ditio
nal c
ompe
nsat
ion
from
the
repo
rting
ent
ity) a
nd
whe
n su
ch re
venu
e w
as e
xclu
ded
from
the
pric
ing
of m
edic
al b
enef
its. T
he a
mou
nts
repo
rted
in th
e in
divi
dual
col
umns
sho
uld
com
e di
rect
ly fr
om P
age
7, L
ine
3 of
the
annu
al st
atem
ent.
Line
(8) U
nder
writ
ing
Ris
k In
curr
ed C
laim
s. Li
ne (6
) min
us L
ine
(7).
Line
(9) U
nder
writ
ing
Ris
k C
laim
s Rat
io.L
ine
(8) /
Lin
e (5
). If
eith
er L
ine
(5) o
r Lin
e (8
) is z
ero
or n
egat
ive,
Lin
e (9
) is z
ero.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
17
10/2
0/20
17
Line
(10)
Und
erw
ritin
g R
isk
Fact
or. A
wei
ghte
d av
erag
e fa
ctor
bas
ed o
n th
e am
ount
repo
rted
in L
ine
(5),
Und
erw
ritin
g R
isk
Rev
enue
.
$0
– $
3 $3
– $
25
Ove
r $25
Mill
ion
Mill
ion
Mill
ion
Com
preh
ensi
ve M
edic
al &
Hos
pita
l 0.
150
0.15
0 0.
090
M
edic
are
Supp
lem
ent
0.10
5 0.
067
0.06
7 D
enta
l & V
isio
n 0.
120
0.07
6 0.
076
Stan
d-A
lone
Med
icar
e Pa
rt D
Cov
erag
e 0.
251
0.25
1 0.
151
O
ther
Hea
lth
0.13
0 0.
130
0.13
0 O
ther
Non
-Hea
lth
0.13
0
0.
130
0.13
0
Line
(11)
Bas
e U
nder
writ
ing
Ris
k R
BC
. Lin
e (5
) x L
ine
(9) x
Lin
e (1
0).
Line
(12
) M
anag
ed C
are
Dis
coun
t. Fo
r C
ompr
ehen
sive
Med
ical
& H
ospi
tal,
Med
icar
e Su
pple
men
t (in
clud
ing
Med
icar
e Se
lect
) an
d D
enta
l/Vis
ion,
a m
anag
ed c
are
disc
ount
, bas
ed o
n th
e ty
pe o
f man
aged
car
e ar
rang
emen
ts a
n or
gani
zatio
n ha
s w
ith it
s pr
ovid
ers,
is in
clud
ed to
refle
ct th
e re
duct
ion
in th
e un
certa
inty
abo
ut fu
ture
cla
im
paym
ents
attr
ibut
able
to th
e m
anag
ed c
are
arra
ngem
ents
. The
dis
coun
t fac
tor
is f
rom
Col
umn
(3),
Line
(17
) of
the
Man
aged
Car
e Cr
edit
Cal
cula
tion
page
. An
aver
age
fact
or b
ased
on
the
com
bine
d re
sults
of t
hese
thre
e ca
tego
ries i
s use
d fo
r all
thre
e.
For S
tand
-Alo
ne M
edic
are
Part
D C
over
age,
a s
epar
ate
man
aged
car
e di
scou
nt (o
r fed
eral
pro
gram
cre
dit)
is in
clud
ed to
refle
ct o
nly
the
redu
ctio
n in
unc
erta
inty
abo
ut
futu
re c
laim
s pay
men
ts a
ttrib
utab
le to
fede
ral r
isk
arra
ngem
ents
. The
dis
coun
t fac
tor i
s fro
m C
olum
n (4
), Li
ne (1
7) o
f the
Man
aged
Car
e C
redi
t Cal
cula
tion
page
.
Ther
e is
no
disc
ount
giv
en fo
r the
Oth
er H
ealth
and
Oth
er N
on-H
ealth
line
s of b
usin
ess.
Line
(13)
RB
C A
fter M
anag
ed C
are
Dis
coun
t.Li
ne(1
1) x
Lin
e (1
2).
Line
(14)
Max
imum
Per
-Ind
ivid
ual R
isk
Afte
r Rei
nsur
ance
. Thi
s is
the
max
imum
afte
r-re
insu
ranc
e lo
ss fo
r any
sin
gle
indi
vidu
al. W
here
spe
cific
sto
p-lo
ss re
insu
ranc
e pr
otec
tion
is in
pla
ce, t
he m
axim
um p
er-in
divi
dual
risk
afte
r rei
nsur
ance
is e
qual
to th
e hi
ghes
t atta
chm
ent p
oint
on
such
stop
-loss
rein
sura
nce,
subj
ect t
o th
e fo
llow
ing:
Whe
re c
over
age
unde
r the
sto
p-lo
ss p
rote
ctio
n (p
lus
rete
ntio
n) w
ith th
e hi
ghes
t atta
chm
ent p
oint
is c
appe
d at
less
than
$75
0,00
0 pe
r mem
ber,
the
max
imum
re
tain
ed lo
ss w
ill b
e eq
ual t
o su
ch a
ttach
men
t poi
nt p
lus t
he d
iffer
ence
bet
wee
n th
e co
vera
ge (p
lus r
eten
tion)
and
$75
0,00
0.
Whe
re th
e st
op-lo
ss la
yer i
s sub
ject
to p
artic
ipat
ion
by th
e re
porti
ng e
ntity
, the
max
imum
reta
ined
risk
as c
alcu
late
d ab
ove
will
be
incr
ease
d by
the
repo
rting
en
tity’
s par
ticip
atio
n in
the
stop
-loss
laye
r (up
to $
750,
000
less
rete
ntio
n).
If th
ere
is n
o sp
ecifi
c st
op-lo
ss o
r rei
nsur
ance
in p
lace
, ent
er $
9,99
9,99
9.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
18
10/2
0/20
17
Exam
ples
of t
he c
alcu
latio
n ar
e pr
esen
ted
belo
w:
EXA
MPL
E 1
(Rep
ortin
g en
tity
prov
ides
Com
preh
ensi
ve C
are)
:
H
ighe
st A
ttach
men
t Poi
nt (R
eten
tion)
$1
00,0
00
R
eins
uran
ce C
over
age
90
% o
f $50
0,00
0 in
exc
ess o
f $10
0,00
0
Max
imum
rein
sure
d co
vera
ge
$600
,000
($10
0,00
0 +
$500
,000
)
M
axim
um R
et. R
isk
=
$1
00,0
00
ded
uctib
le
+ $1
50,0
00
($75
0,00
0 –
$600
,000
)
+
$ 5
0,00
0
(10%
of (
$600
,000
– $
100,
000)
cov
erag
e la
yer)
=
$300
,000
EXA
MPL
E 2
(Rep
ortin
g en
tity
prov
ides
Com
preh
ensi
ve C
are)
:
H
ighe
st A
ttach
men
t Poi
nt (R
eten
tion)
$
75,0
00
R
eins
uran
ce C
over
age
90
% o
f $1,
000,
000
in e
xces
s of $
75,0
00
M
axim
um re
insu
red
cove
rage
$1
,075
,000
($75
,000
+ $
1,00
0,00
0)
M
axim
um R
et. R
isk
=
$
75,
000
ded
uctib
le
+
0
($
750,
000
– $1
,075
,000
)
+
$ 6
7,50
0 (1
0% o
f ($7
50,0
00 –
$75,
000)
) cov
erag
e la
yer)
=
$142
,500
Line
(15)
Alte
rnat
e R
isk
Cha
rge.
This
is tw
ice
the
amou
nt in
Lin
e (1
4) fo
r co
lum
ns (1
), (2
), (3
) and
(5) a
nd C
olum
n (4
) is
six
times
the
amou
nt in
Lin
e (1
4), s
ubje
ct to
a
max
imum
of $
1,50
0,00
0 fo
r Col
umn
(1),
$50,
000
for C
olum
ns (2
), (3
) and
(5) a
nd $
150,
000
for C
olum
n (4
). C
olum
n (6
) is e
xclu
ded
from
this
cal
cula
tion.
Line
(16)
Alte
rnat
e R
isk
Adj
ustm
ent.
This
line
sho
ws
the
larg
est v
alue
in L
ine
(15)
for t
he c
olum
n an
d al
l col
umns
left
of th
e co
lum
n. C
olum
n (6
) is
excl
uded
from
this
ca
lcul
atio
n.
Line
(17)
Net
Alte
rnat
e R
isk
Cha
rge.
This
is th
e am
ount
in L
ine
(15)
, les
s the
am
ount
in th
e pr
evio
us c
olum
n of
Lin
e (1
6), b
ut n
ot le
ss th
an z
ero.
Col
umn
(6) i
s ex
clud
ed
from
this
cal
cula
tion.
Line
(18)
Net
Und
erw
ritin
g R
isk
RB
C.T
his i
s the
max
imum
of L
ine
(13)
and
Lin
e (1
7) fo
r eac
h of
col
umns
(1) t
hrou
gh (5
). Th
is is
the
amou
nt in
Lin
e (1
1), C
olum
n (6
).Th
e am
ount
in C
olum
n (7
) is t
he su
m o
f the
val
ues i
n C
olum
ns (1
) thr
ough
(6).
UN
DE
RW
RIT
ING
RIS
K
XR
012-
A(F
OR
INFO
RM
ATI
ON
AL
PUR
POSE
S O
NLY
)
Und
erw
ritin
g ris
k is
the
larg
est p
ortio
n of
the
risk-
base
d ca
pita
l cha
rge
for m
ost r
epor
ting
entit
ies.
The
Und
erw
ritin
g R
isk
page
XR
012
gene
rate
s the
RB
C re
quire
men
t for
th
e ris
k of
fluc
tuat
ions
in u
nder
writ
ing
expe
rienc
e. T
he U
nder
writ
ing
Ris
k pa
ge X
R01
2-A
will
be
for i
nfor
mat
iona
l pur
pose
s on
ly fo
r 201
7 re
porti
ng fo
r hea
lth e
ntiti
es.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
19
10/2
0/20
17
This
pag
e w
ill b
reak
out
pre
miu
ms,
clai
ms
and
the
loss
ratio
by
indi
vidu
al, s
mal
l gro
up a
nd la
rge
grou
p. T
he c
redi
t tha
t is
allo
wed
for m
anag
ed c
are
in th
is p
age
com
es
from
the
Man
aged
Car
e C
redi
t Cal
cula
tion
page
.
The
purp
ose
of th
is p
age
is to
bre
ak o
ut p
rem
ium
s, cl
aim
s an
d th
e lo
ss ra
tio fo
r cov
erag
e su
bjec
t to
the
fede
ral A
ffor
dabl
e C
are
Act
(AC
A) r
isks
on
a m
ore
gran
ular
leve
l (in
divi
dual
, sm
all g
roup
and
larg
e gr
oup)
to a
llow
regu
lato
rs to
ana
lyze
the
impa
ct o
f the
AC
A o
n a
heal
th in
sura
nce
entit
y. B
y br
eaki
ng o
ut th
e pr
emiu
ms,
clai
ms
and
loss
ratio
into
indi
vidu
al, s
mal
l gro
up a
nd la
rge
grou
p, re
gula
tors
will
be
able
to b
ette
r ide
ntify
if th
e he
alth
ent
ity h
as h
ad a
cha
nge
in th
eir w
ritin
gs th
roug
h th
e in
divi
dual
or
gro
up m
arke
ts a
nd a
naly
ze a
com
pany
’s r
isk
pool
by
the
clai
ms
repo
rted.
Thi
s in
form
atio
n w
ill p
rovi
de r
egul
ator
s w
ith th
e da
ta n
eede
d to
ana
lyze
and
iden
tify
if se
para
te ri
sk c
harg
es sh
ould
app
ly in
divi
dual
, sm
all g
roup
and
larg
e gr
oup
plan
s in
the
futu
re. T
his d
ata
will
aga
in o
nly
be fo
r inf
orm
atio
nal p
urpo
ses f
or 2
017
repo
rting
.
The
repo
rting
of t
his p
age
will
follo
w th
e re
porti
ng o
f pag
e X
R012
–Und
erw
ritin
g R
isk
and
will
be
on th
e ba
sis o
f the
hea
lth a
nnua
l fin
anci
al st
atem
ent f
iling
. A c
ompa
ny
may
not
hav
e th
e va
lues
in L
ines
(4)
and
(15
) se
para
ted
into
the
thre
e m
arke
t seg
men
ts. A
n al
loca
tion
of th
e va
lue
in L
ine
(4)
base
d on
ear
ned
prem
ium
rep
orte
d by
m
arke
t seg
men
t in
the
com
pany
’s p
repa
ratio
n of
the
Supp
lem
enta
l Hea
lth C
are
Exhi
bit m
ay b
e us
ed a
s com
pany
reco
rds i
n co
mpl
etin
g Li
nes (
1) th
roug
h (3
). Si
mila
rly, a
n al
loca
tion
of th
e va
lue
in L
ine
(15)
bas
ed o
n in
curr
ed c
laim
s re
porte
d by
mar
ket s
egm
ent i
n th
e co
mpa
ny’s
pre
para
tion
of th
e Su
pple
men
tal H
ealth
Car
e Ex
hibi
t may
be
used
. If t
he c
ompa
ny is
una
ble
to c
ompl
ete
the
sche
dule
, an
expl
anat
ion
shou
ld b
e pr
ovid
ed in
the
foot
note
as t
o w
hy th
e co
mpa
ny is
una
ble
to p
rovi
de th
is in
form
atio
n.
L(1
) thr
ough
L(3
3)
Ther
e ar
e si
x lin
es o
f bus
ines
s us
ed in
the
form
ula
for c
alcu
latin
g th
e R
BC
requ
irem
ent f
or th
is ri
sk: (
1) C
ompr
ehen
sive
Med
ical
and
Hos
pita
l; (2
) Med
icar
e Su
pple
men
t; (3
) Den
tal/V
isio
n; (4
) Sta
nd-A
lone
Med
icar
e Pa
rt D
Cov
erag
e; a
nd (5
) Oth
er H
ealth
; and
(6) O
ther
Non
-Hea
lth. T
hese
line
s of
bus
ines
s ar
e ba
sed
on th
e he
alth
ann
ual
finan
cial
sta
tem
ent r
epor
ting
and
do n
ot c
oinc
ide
with
the
lines
of b
usin
ess
repo
rted
in th
e Su
pple
men
tal H
ealth
Car
e Ex
hibi
t. Ea
ch o
f the
se li
nes
of b
usin
ess
has
its o
wn
colu
mn
in th
e U
nder
writ
ing
Ris
k –
Expe
rienc
e Fl
uctu
atio
n R
isk
tabl
e. T
he c
ateg
orie
s lis
ted
in th
e co
lum
ns o
f thi
s pa
ge in
clud
e al
l ris
k re
venu
e an
d ris
k re
venu
e th
at is
re
ceiv
ed fr
om a
noth
er re
porti
ng e
ntity
in e
xcha
nge
for m
edic
al se
rvic
es p
rovi
ded
to it
s mem
bers
. The
des
crip
tions
of t
he it
ems a
re d
escr
ibed
as f
ollo
ws:
Col
umn
(1)
- C
ompr
ehen
sive
Med
ical
& H
ospi
tal.
Incl
udes
pol
icie
s pr
ovid
ing
for
med
ical
cov
erag
es in
clud
ing
hosp
ital,
surg
ical
, maj
or m
edic
al,
Med
icar
e ris
k co
vera
ge (
but
NO
T M
edic
are
Supp
lem
ent),
and
Med
icai
d ris
k co
vera
ge.
This
cat
egor
y D
OES
NO
T in
clud
e ad
min
istra
tive
serv
ices
co
ntra
cts
(ASC
), ad
min
istra
tive
serv
ices
onl
y (A
SO)
cont
ract
s, or
any
non
-und
erw
ritte
n bu
sine
ss. T
hese
pro
gram
s ar
e re
porte
d in
the
Bus
ines
s R
isk
sect
ion
of th
e fo
rmul
a. N
eith
er d
oes
it in
clud
e th
e Fe
dera
l Em
ploy
ees
Hea
lth B
enef
it Pr
ogra
m (
FEH
BP)
or
TRIC
AR
E. T
he a
ltern
ativ
e ris
k ch
arge
, w
hich
is tw
ice
the
max
imum
reta
ined
risk
afte
r rei
nsur
ance
on
any
sing
le in
divi
dual
, can
not e
xcee
d $1
,500
,000
. Pre
scrip
tion
drug
ben
efits
incl
uded
in
maj
or m
edic
al in
sura
nce
plan
s (in
clud
ing
Med
icar
e A
dvan
tage
pla
ns w
ith p
resc
riptio
n dr
ug c
over
age)
sho
uld
be r
epor
ted
in th
is li
ne. T
hese
ben
efits
sh
ould
als
o be
incl
uded
in th
e M
anag
ed C
are
Cre
dit c
alcu
latio
n.
Col
umn
(2) -
Med
icar
e Su
pple
men
t. Th
is is
bus
ines
s re
porte
d in
the
Med
icar
e Su
pple
men
t Ins
uran
ce E
xper
ienc
e Ex
hibi
t of t
he a
nnua
l sta
tem
ent a
nd
incl
udes
Med
icar
e Se
lect
. Med
icar
e ris
k bu
sine
ss is
repo
rted
unde
r com
preh
ensi
ve m
edic
al a
nd h
ospi
tal.
Col
umn
(3) -
Den
tal &
Vis
ion.
Thi
s is
lim
ited
to p
olic
ies
prov
idin
g fo
r den
tal-o
nly
or v
isio
n-on
ly c
over
age
issu
ed a
s a
stan
d-al
one
polic
y or
as
a rid
er
to a
med
ical
pol
icy,
that
is n
ot re
late
d to
the
med
ical
pol
icy
thro
ugh
dedu
ctib
les
or o
ut-o
f-po
cket
lim
its. C
olum
n (3
) sho
uld
be c
ompl
eted
for L
ines
(1)
thro
ugh
(3),
(9)
thro
ugh
(11)
and
(14
) an
d (1
8) th
roug
h (2
0) if
the
earn
ed p
rem
ium
in C
olum
n (3
), Li
ne (
4) is
fiv
e pe
rcen
t or
mor
e th
an th
e ea
rned
pr
emiu
m re
porte
d in
Col
umn
(1),
Line
(4).
Col
umn
(4)
- St
and-
Alo
neM
edic
are
Part
D C
over
age.
Thi
s in
clud
es b
oth
indi
vidu
al c
over
age
and
grou
p co
vera
ge o
f M
edic
are
Part
D c
over
age
whe
re th
e pl
an s
pons
or h
as r
isk
corr
idor
pro
tect
ion.
See
App
endi
x 2
for
defin
ition
of
thes
e te
rms.
Med
icar
e dr
ug b
enef
its in
clud
ed in
maj
or m
edic
al
plan
s or b
enef
its th
at d
o no
t mee
t the
abo
ve c
riter
ia a
re n
ot to
be
incl
uded
in th
is li
ne. S
uppl
emen
tal b
enef
its w
ithin
Med
icar
e Pa
rt D
(ben
efits
in e
xces
s
© 1
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2017
Nat
iona
l Ass
ocia
tion
of In
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nce
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mis
sion
ers
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17
of th
e st
anda
rd b
enef
it de
sign
) ar
e ad
dres
sed
sepa
rate
ly o
n pa
ge X
R01
4. E
mpl
oyer
-bas
ed P
art D
cov
erag
e th
at is
in a
n un
insu
red
plan
as
defin
ed in
SS
AP N
o. 4
7—U
nins
ured
Pla
ns is
not
to b
e in
clud
ed h
ere.
Col
umn
(5)
– O
ther
Hea
lth C
over
ages
. Th
is i
nclu
des
othe
r he
alth
cov
erag
es s
uch
as o
ther
sta
nd-a
lone
pre
scrip
tion
drug
ben
efit
plan
s, N
OT
INC
LUD
ED
AB
OV
E th
at h
ave
not b
een
spec
ifica
lly a
ddre
ssed
in th
e ot
her c
olum
ns li
sted
abo
ve.
Col
umn
(6) -
Oth
er N
on-H
ealth
Cov
erag
es. T
his i
nclu
des l
ife a
nd p
rope
rty a
nd c
asua
lty c
over
ages
.
The
follo
win
g pa
ragr
aphs
exp
lain
the
mea
ning
of e
ach
line
of th
e ta
ble
for c
ompu
ting
the
expe
rienc
e flu
ctua
tion
unde
rwrit
ing
risk
RB
C.
Line
(1) I
ndiv
idua
l Pre
miu
m. T
his
is th
e am
ount
of m
oney
cha
rged
by
the
repo
rting
ent
ity fo
r the
spe
cifie
d be
nefit
pla
n. It
is th
e ea
rned
am
ount
of p
repa
ymen
ts (u
sual
ly
on a
per
mem
ber p
er m
onth
bas
is) m
ade
by a
n in
divi
dual
to th
e re
porti
ng e
ntity
in e
xcha
nge
for s
ervi
ces
to b
e pr
ovid
ed o
r off
ered
by
such
org
aniz
atio
n. H
owev
er, i
t doe
s no
t inc
lude
rece
ipts
und
er a
dmin
istra
tive
serv
ices
onl
y (A
SO) c
ontra
cts;
or a
dmin
istra
tive
serv
ices
con
tract
s (A
SC);
or a
ny n
on-u
nder
writ
ten
busi
ness
. Nor
doe
s it i
nclu
de
Fede
ral E
mpl
oyee
s H
ealth
Ben
efit
Prog
ram
(FE
HB
P) a
nd T
RIC
AR
E. R
epor
t pre
miu
m n
et o
f pay
men
ts fo
r sto
p-lo
ss o
r oth
er re
insu
ranc
e. T
he a
mou
nts
repo
rted
in th
e in
divi
dual
col
umns
will
be
base
d on
com
pany
reco
rds f
or c
over
age
for t
he In
divi
dual
mar
ket a
s def
ined
by
the
AC
A.
Line
(2)
Sm
all G
roup
Pre
miu
m. T
his
is th
e am
ount
of
mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
for
the
spec
ified
ben
efit
plan
. It i
s th
e ea
rned
am
ount
of
prep
aym
ents
(u
sual
ly o
n a
per
mem
ber
per
mon
th b
asis
) m
ade
by o
r fo
r a
smal
l gr
oup
plan
to
the
repo
rting
ent
ity i
n ex
chan
ge f
or s
ervi
ces
to b
e pr
ovid
ed o
r of
fere
d by
suc
h or
gani
zatio
n. H
owev
er,
it do
es n
ot i
nclu
de r
ecei
pts
unde
r ad
min
istra
tive
serv
ices
onl
y (A
SO)
cont
ract
s; o
r ad
min
istra
tive
serv
ices
con
tract
s (A
SC);
or a
ny n
on-
unde
rwrit
ten
busi
ness
. Nor
doe
s it
incl
ude
Fede
ral E
mpl
oyee
s H
ealth
Ben
efit
Prog
ram
(FEH
BP)
and
TR
ICA
RE.
Rep
ort p
rem
ium
net
of p
aym
ents
for s
top-
loss
or o
ther
re
insu
ranc
e. T
he a
mou
nts r
epor
ted
in th
e in
divi
dual
col
umns
will
be
base
d on
com
pany
reco
rds f
or c
over
age
in th
e Sm
all G
roup
mar
ket a
s def
ined
by
the
AC
A.
Line
(3)
Lar
ge G
roup
Pre
miu
m. T
his
is th
e am
ount
of
mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
for
the
spec
ified
ben
efit
plan
. It i
s th
e ea
rned
am
ount
of
prep
aym
ents
(u
sual
ly o
n a
per
mem
ber
per
mon
th b
asis
) m
ade
by a
lar
ge g
roup
to
the
repo
rting
ent
ity i
n ex
chan
ge f
or s
ervi
ces
to b
e pr
ovid
ed o
r of
fere
d by
suc
h or
gani
zatio
n.
How
ever
, it d
oes
not i
nclu
de re
ceip
ts u
nder
adm
inis
trativ
e se
rvic
es o
nly
(ASO
) con
tract
s; o
r adm
inis
trativ
e se
rvic
es c
ontra
cts
(ASC
); or
any
non
-und
erw
ritte
n bu
sine
ss.
Nor
doe
s it
incl
ude
Fede
ral
Empl
oyee
s H
ealth
Ben
efit
Prog
ram
(FE
HB
P) a
nd T
RIC
AR
E. R
epor
t pr
emiu
m n
et o
f pa
ymen
ts f
or s
top-
loss
or
othe
r re
insu
ranc
e. T
he
amou
nts r
epor
ted
in th
e in
divi
dual
col
umns
will
be
base
d on
com
pany
reco
rds f
or c
over
age
in th
e La
rge
Gro
up m
arke
t as d
efin
ed b
y th
e A
CA
.
Line
(4) T
otal
Pre
miu
m.T
his
is th
e am
ount
of m
oney
cha
rged
by
the
repo
rting
ent
ity fo
r the
spe
cifie
d be
nefit
pla
n. It
is th
e ea
rned
am
ount
of p
repa
ymen
ts (u
sual
ly o
n a
per
mem
ber
per
mon
th b
asis
) m
ade
by a
cov
ered
gro
up o
r in
divi
dual
to th
e re
porti
ng e
ntity
in e
xcha
nge
for
serv
ices
to b
e pr
ovid
ed o
r of
fere
d by
suc
h or
gani
zatio
n.
How
ever
, it d
oes
not i
nclu
de re
ceip
ts u
nder
adm
inis
trativ
e se
rvic
es o
nly
(ASO
) con
tract
s; o
r adm
inis
trativ
e se
rvic
es c
ontra
cts
(ASC
); or
any
non
-und
erw
ritte
n bu
sine
ss.
Nor
doe
s it
incl
ude
the
Fede
ral E
mpl
oyee
s H
ealth
Ben
efit
Prog
ram
(FE
HB
P) a
nd T
RIC
AR
E. R
epor
t pre
miu
m n
et o
f pa
ymen
ts f
or s
top-
loss
or
othe
r re
insu
ranc
e. T
he
amou
nts
repo
rted
in th
e in
divi
dual
col
umns
sho
uld
com
e di
rect
ly fr
om A
naly
sis
of O
pera
tions
by
Line
s of
Bus
ines
s, Pa
ge 7
, Lin
es 1
and
2 of
the
annu
al s
tate
men
t. Th
e am
ount
rep
orte
d in
Lin
e (4
) fo
r th
e C
ompr
ehen
sive
Med
ical
and
Den
tal
and
Vis
ion
colu
mns
sho
uld
be e
qual
to
the
sum
of
Line
s (1
) th
roug
h (3
). Fo
r St
and-
Alo
ne
Med
icar
e Pa
rt D
Cov
erag
e th
e pr
emiu
m i
nclu
des
bene
ficia
ry p
rem
ium
(st
anda
rd c
over
age
porti
on),
dire
ct s
ubsi
dy,
low
-inco
me
subs
idy
(pre
miu
m p
ortio
n),
Part
D
paym
ent d
emon
stra
tion
amou
nts a
nd ri
sk c
orrid
or p
aym
ent a
djus
tmen
ts. S
ee A
ppen
dix
2 fo
r def
initi
on o
f the
se te
rms.
It do
es n
ot in
clud
e re
venu
e re
ceiv
ed fo
r rei
nsur
ance
pa
ymen
ts o
r lo
w-in
com
e su
bsid
y (c
ost-s
harin
g po
rtion
), w
hich
are
con
side
red
fund
s re
ceiv
ed f
or u
nins
ured
pla
ns in
acc
orda
nce
with
Em
ergi
ng A
ccou
ntin
g Is
sues
(E)
W
orki
ng G
roup
INT.
No.
05-
05 –
Ben
efic
iary
Pre
miu
m (s
uppl
emen
tal b
enef
it po
rtion
) is r
epor
ted
as se
para
te p
rem
ium
in L
ine
(22.
1) o
n pa
ge X
R01
4.
NO
TE: W
here
pre
miu
ms
are
paid
on
a m
onth
ly b
asis
, the
y ar
e ge
nera
lly fu
lly e
arne
d at
the
end
of th
e m
onth
for w
hich
cov
erag
e is
prov
ided
. In
case
s w
here
the
mod
e of
pay
men
t is l
ess f
requ
ent t
han
mon
thly
, a p
ortio
n of
the
prem
ium
pay
men
t will
be
unea
rned
at t
he e
nd o
f any
giv
en re
porti
ng p
erio
d.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
21
10/2
0/20
17
Line
(5) T
itle
XV
III M
edic
are.
Thi
s is
the
earn
ed a
mou
nt o
f mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
(net
of r
eins
uran
ce) f
or M
edic
are
risk
busi
ness
whe
re th
e re
porti
ng
entit
y, f
or a
fee
, agr
ees
to c
over
the
ful
l m
edic
al c
osts
of
Med
icar
e su
bscr
iber
s. Th
is i
nclu
des
the
bene
ficia
ry p
rem
ium
and
fed
eral
gov
ernm
ent’s
dire
ct s
ubsi
dy f
or
pres
crip
tion
drug
cov
erag
e un
der
MA
-PD
pla
ns. T
he to
tal o
f th
is li
ne w
ill ti
e to
the
Ana
lysi
s of
Ope
ratio
ns b
y Li
nes
of B
usin
ess,
Page
7, L
ines
1 a
nd 2
of
the
annu
al
stat
emen
t.
Line
(6) T
itle
XIX
Med
icai
d. T
his i
s the
ear
ned
amou
nt o
f mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
for M
edic
aid
risk
busi
ness
whe
re th
e re
porti
ng e
ntity
, for
a fe
e, a
gree
s to
cove
r the
full
med
ical
cos
ts o
f Med
icai
d su
bscr
iber
s. Th
e to
tal o
f thi
s lin
e w
ill ti
e to
the
Ana
lysi
s of
Ope
ratio
ns b
y Li
nes
of B
usin
ess,
Page
7, L
ines
1 a
nd 2
of t
he a
nnua
l st
atem
ent.
Med
icar
e Pa
rt D
cov
erag
e of
low
-inco
me
enro
llees
is n
ot in
clud
ed in
this
line
.
Line
(7) O
ther
Hea
lth R
isk
Rev
enue
. Thi
s is
ear
ned
amou
nts
char
ged
by th
e re
porti
ng e
ntity
as
a pr
ovid
er o
r int
erm
edia
ry fo
r spe
cifie
d m
edic
al (e
.g.,
full
prof
essi
onal
, de
ntal
, rad
iolo
gy, e
tc.)
serv
ices
pro
vide
d to
the
polic
yhol
ders
, or
mem
bers
of
anot
her i
nsur
er o
r hea
lth e
ntity
. Unl
ike
prem
ium
s, w
hich
are
col
lect
ed f
rom
an
empl
oyer
gr
oup
or i
ndiv
idua
l m
embe
r, ris
k re
venu
e is
the
pre
paid
(us
ually
on
a ca
pita
ted
basi
s) p
aym
ents
, mad
e by
ano
ther
ins
urer
or
heal
th e
ntity
to
the
repo
rting
ent
ity i
n ex
chan
ge f
or s
ervi
ces
to b
e pr
ovid
ed o
r of
fere
d by
suc
h or
gani
zatio
n. P
aym
ents
to p
rovi
ders
und
er r
isk
reve
nue
arra
ngem
ents
are
incl
uded
in th
e R
BC
cal
cula
tion
as
unde
rwrit
ing
risk
reve
nue
and
are
incl
uded
in th
e ca
lcul
atio
n of
man
aged
car
e cr
edits
. Exc
lude
fee
-for
-ser
vice
rev
enue
rec
eive
d by
the
repo
rting
ent
ity f
rom
ano
ther
re
porti
ng e
ntity
. Thi
s rev
enue
is re
porte
d in
the
Bus
ines
s Ris
k se
ctio
n of
the
form
ula
as n
on-u
nder
writ
ten
and
limite
d ris
k re
venu
e. T
he a
mou
nts r
epor
ted
in th
e in
divi
dual
co
lum
ns w
ill c
ome
dire
ctly
from
Pag
e 7,
Lin
e 4
of th
e an
nual
stat
emen
t.
Line
(8) U
nder
writ
ing
Ris
k R
even
ue. T
he su
m o
f Lin
es (4
) thr
ough
(7).
Line
(9) I
ndiv
idua
l Net
Incu
rred
Cla
ims.
Cla
ims
incu
rred
for i
ndiv
idua
l pla
ns (p
aid
clai
ms
+ ch
ange
in u
npai
d cl
aim
s) d
urin
g th
e re
porti
ng y
ear (
net o
f rei
nsur
ance
) tha
tar
e ar
rang
ed fo
r or p
rovi
ded
by th
e re
porti
ng e
ntity
. Pai
d cl
aim
s in
clud
e ca
pita
tion
and
all o
ther
pay
men
ts to
pro
vide
rs fo
r ser
vice
s to
mem
bers
of t
he re
porti
ng e
ntity
, as
wel
l as
reim
burs
emen
t dire
ctly
to m
embe
rs f
or c
over
ed s
ervi
ces.
Paid
cla
ims
also
incl
ude
sala
ries
paid
to r
epor
ting
entit
y em
ploy
ees
that
pro
vide
med
ical
ser
vice
s to
m
embe
rs a
nd re
late
d ex
pens
es. D
o no
t inc
lude
ASC
pay
men
ts o
r Fed
eral
Em
ploy
ees
Hea
lth B
enef
it Pr
ogra
m (F
EHB
P) a
nd T
RIC
AR
E cl
aim
s. Th
ese
amou
nts
repo
rted
in
the
indi
vidu
al c
olum
ns w
ill b
e ba
sed
on c
ompa
ny re
cord
s for
cov
erag
e fo
r the
Indi
vidu
al m
arke
t as d
efin
ed b
y th
e A
CA
.
Line
(10)
Sm
all G
roup
Net
Incu
rred
Cla
ims.
Cla
ims
incu
rred
for s
mal
l gro
up p
lans
(pai
d cl
aim
s +
chan
ge in
unp
aid
clai
ms)
dur
ing
the
repo
rting
yea
r (ne
t of r
eins
uran
ce)
that
are
arr
ange
d fo
r or p
rovi
ded
by th
e re
porti
ng e
ntity
. Pai
d cl
aim
s inc
lude
cap
itatio
n an
d al
l oth
er p
aym
ents
to p
rovi
ders
for s
ervi
ces t
o m
embe
rs o
f the
repo
rting
ent
ity,
as w
ell a
s re
imbu
rsem
ent d
irect
ly to
mem
bers
for c
over
ed s
ervi
ces.
Paid
cla
ims
also
incl
ude
sala
ries
paid
to re
porti
ng e
ntity
em
ploy
ees
that
pro
vide
med
ical
ser
vice
s to
m
embe
rs a
nd re
late
d ex
pens
es. D
o no
t inc
lude
ASC
pay
men
ts o
r Fed
eral
Em
ploy
ees
Hea
lth B
enef
it Pr
ogra
m (F
EHB
P) a
nd T
RIC
AR
E cl
aim
s. Th
ese
amou
nts
repo
rted
in
the
indi
vidu
al c
olum
ns w
ill b
e ba
sed
on c
ompa
ny re
cord
s for
cov
erag
e in
the
Smal
l Gro
up m
arke
t as d
efin
ed b
y th
e A
CA
.
Line
(11)
Lar
ge G
roup
Net
Incu
rred
Cla
ims.
Cla
ims
incu
rred
for l
arge
gro
up p
lans
(pai
d cl
aim
s +
chan
ge in
unp
aid
clai
ms)
dur
ing
the
repo
rting
yea
r (ne
t of r
eins
uran
ce)
that
are
arr
ange
d fo
r or p
rovi
ded
by th
e re
porti
ng e
ntity
. Pai
d cl
aim
s inc
lude
cap
itatio
n an
d al
l oth
er p
aym
ents
to p
rovi
ders
for s
ervi
ces t
o m
embe
rs o
f the
repo
rting
ent
ity,
as w
ell a
s re
imbu
rsem
ent d
irect
ly to
mem
bers
for c
over
ed s
ervi
ces.
Paid
cla
ims
also
incl
ude
sala
ries
paid
to re
porti
ng e
ntity
em
ploy
ees
that
pro
vide
med
ical
ser
vice
s to
m
embe
rs a
nd re
late
d ex
pens
es. D
o no
t inc
lude
ASC
pay
men
ts o
r Fed
eral
Em
ploy
ees
Hea
lth B
enef
it Pr
ogra
m (F
EHB
P) a
nd T
RIC
AR
E cl
aim
s. Th
ese
amou
nts
repo
rted
in
the
indi
vidu
al c
olum
ns w
ill b
e ba
sed
on c
ompa
ny re
cord
s for
cov
erag
e in
the
Larg
e G
roup
mar
ket a
s def
ined
by
the
AC
A.
Line
(12)
Titl
e X
VII
I-M
edic
are
Net
Incu
rred
Cla
ims.
Cla
ims i
ncur
red
for M
edic
are
Ris
k C
over
age
durin
g th
e re
porti
ng y
ear (
net o
f rei
nsur
ance
) dur
ing
the
repo
rting
yea
r.
Line
(13)
Titl
e X
IX-M
edic
aid
Net
Incu
rred
Cla
ims.
Cla
ims i
ncur
red
for M
edic
aid
Ris
k C
over
age
durin
g th
e re
porti
ng y
ear (
net o
f rei
nsur
ance
) dur
ing
the
repo
rting
yea
r.
Line
(14
) O
ther
Hea
lth N
et I
ncur
red
Cla
ims.
Cla
ims
incu
rred
for
Oth
er H
ealth
Cov
erag
e du
ring
the
repo
rting
yea
r (n
et o
f re
insu
ranc
e) d
urin
g th
e re
porti
ng y
ear.
The
amou
nts r
epor
ted
will
be
base
d on
com
pany
reco
rds.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
22
10/2
0/20
17
Line
(15)
Tot
al N
et In
curr
ed C
laim
s.To
tal C
laim
s in
curr
ed (p
aid
clai
ms
+ ch
ange
in u
npai
d cl
aim
s) d
urin
g th
e re
porti
ng y
ear (
net o
f rei
nsur
ance
) tha
t are
arr
ange
d fo
r or
prov
ided
by
the
repo
rting
ent
ity.
Paid
cla
ims
incl
ude
capi
tatio
n an
d al
l ot
her
paym
ents
to
prov
ider
s fo
r se
rvic
es t
o m
embe
rs o
f th
e re
porti
ng e
ntity
, as
wel
l as
re
imbu
rsem
ent d
irect
ly to
mem
bers
for c
over
ed s
ervi
ces.
Paid
cla
ims
also
incl
ude
sala
ries
paid
to re
porti
ng e
ntity
em
ploy
ees
that
pro
vide
med
ical
ser
vice
s to
mem
bers
an
d re
late
d ex
pens
es. D
o no
t inc
lude
ASC
pay
men
ts o
r Fed
eral
Em
ploy
ees
Hea
lth B
enef
it Pr
ogra
m (F
EHB
P) a
nd T
RIC
AR
E cl
aim
s. Th
ese
amou
nts
are
foun
d on
Pag
e 7,
Li
ne 1
7 of
the
annu
al st
atem
ent.
Line
(15)
shou
ld a
lso
equa
l the
sum
of L
ines
(9) t
hrou
gh (1
4).
For
Stan
d-A
lone
Med
icar
e Pa
rt D
Cov
erag
e, n
et in
curr
ed c
laim
s sh
ould
ref
lect
cla
ims
net o
f re
insu
ranc
e co
vera
ge (
as d
efin
ed in
App
endi
x 2)
. Whe
re th
ere
has
been
pr
epay
men
t und
er th
e re
insu
ranc
e co
vera
ge, p
aid
clai
ms
shou
ld b
e of
fset
from
the
cum
ulat
ive
depo
sits
. Unp
aid
clai
ms
liabi
litie
s sh
ould
refle
ct e
xpec
ted
reco
verie
s fr
om
the
rein
sura
nce
cove
rage
, for
cla
ims
unpa
id b
y th
e PD
P or
for a
mou
nts
cove
red
unde
r the
rein
sura
nce
cove
rage
that
exc
eed
the
cum
ulat
ive
depo
sits
. Whe
re th
ere
has
not
been
any
pre
paym
ent u
nder
the
rein
sura
nce
cove
rage
, unp
aid
clai
m li
abili
ties s
houl
d re
flect
exp
ecte
d am
ount
s stil
l due
from
CM
S.
Line
(16)
Fee
-for
-Ser
vice
Off
set.
Rep
ort f
ee fo
r ser
vice
reve
nue
that
is d
irect
ly re
late
d to
med
ical
exp
ense
pay
men
ts. T
he fe
e fo
r ser
vice
line
doe
s no
t inc
lude
reve
nue
whe
re th
ere
is n
o as
soci
ated
cla
im p
aym
ent (
e.g.
, fee
s fr
om n
on-m
embe
r pat
ient
s w
here
the
prov
ider
rece
ives
no
addi
tiona
l com
pens
atio
n fr
om th
e re
porti
ng e
ntity
) and
w
hen
such
reve
nue
was
exc
lude
d fr
om th
e pr
icin
g of
med
ical
ben
efits
. The
am
ount
s re
porte
d in
the
indi
vidu
al c
olum
ns s
houl
d co
me
dire
ctly
from
Pag
e 7,
Lin
e 3
of th
e an
nual
stat
emen
t.
Line
(17)
Und
erw
ritin
g R
isk
Incu
rred
Cla
ims.
Line
(15)
min
us L
ine
(16)
.
Line
(18)
Indi
vidu
al U
nder
writ
ing
Ris
k C
laim
s Rat
io.L
ine
(9) /
Lin
e (1
). If
eith
er L
ine
(1) o
r Lin
e (9
) is z
ero
or n
egat
ive,
Lin
e (1
8) is
zer
o.
Line
(19)
Sm
all G
roup
Und
erw
ritin
g R
isk
Cla
ims R
atio
.Lin
e (1
0) /
Line
(2).
If e
ither
Lin
e (2
) or L
ine
(10)
is z
ero
or n
egat
ive,
Lin
e (1
9) is
zer
o.
Line
(20)
Lar
ge G
roup
Und
erw
ritin
g R
isk
Cla
ims R
atio
.Lin
e (1
1) /
Line
(3).
If e
ither
Lin
e (1
1) o
r Lin
e (3
) is z
ero
or n
egat
ive,
Lin
e (2
0) is
zer
o.
Line
(21)
Titl
e X
VII
I-M
edic
are
Und
erw
ritin
g R
isk
Cla
ims R
atio
. Lin
e (1
2) /
Line
(5).
If e
ither
Lin
e (1
2) o
r Lin
e (5
) is z
ero
or n
egat
ive,
Lin
e (2
1) is
zer
o.
Line
(22)
Titl
e X
IX-M
edic
aid
Und
erw
ritin
g R
isk
Cla
ims R
atio
. Lin
e (1
3) /
Line
(6).
If ei
ther
Lin
e (1
3) o
r Lin
e (6
) is z
ero
or n
egat
ive,
Lin
e (2
2) is
zer
o.
Line
(23)
Oth
er H
ealth
Und
erw
ritin
g R
isk
Cla
ims R
atio
. Lin
e (1
4) /
Line
(7).
If e
ither
Lin
e (1
4) o
r Lin
e (7
) is z
ero
or n
egat
ive,
Lin
e (2
3) is
zer
o.
Line
(24)
Und
erw
ritin
g R
isk
Cla
ims R
atio
.Lin
e (1
7) /
Line
(8).
If e
ither
Lin
e (1
7) o
r Lin
e (8
) is z
ero
or n
egat
ive,
Lin
e (2
4) is
zer
o.
Line
(25)
Und
erw
ritin
g R
isk
Fact
or. A
wei
ghte
d av
erag
e fa
ctor
bas
ed o
n th
e am
ount
repo
rted
in L
ine
(8),
Und
erw
ritin
g R
isk
Rev
enue
.
$0
– $
3 $3
– $
25
Ove
r $25
Mill
ion
Mill
ion
Mill
ion
Com
preh
ensi
ve M
edic
al &
Hos
pita
l 0.
150
0.15
0 0.
090
M
edic
are
Supp
lem
ent
0.10
5 0.
067
0.06
7 D
enta
l & V
isio
n 0.
120
0.07
6 0.
076
Stan
d-A
lone
Med
icar
e Pa
rt D
Cov
erag
e 0.
251
0.25
1 0.
151
O
ther
Hea
lth
0.13
0 0.
130
0.13
0 O
ther
Non
-Hea
lth
0.13
0
0.
130
0.13
0
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
23
10/2
0/20
17
Line
(26)
Bas
e U
nder
writ
ing
Ris
k R
BC
. Lin
e (8
) x L
ine
(24)
x L
ine
(25)
.
Line
(27)
Man
aged
Car
e D
isco
unt F
acto
r. Fo
r Com
preh
ensi
ve M
edic
al &
Hos
pita
l, M
edic
are
Supp
lem
ent (
incl
udin
g M
edic
are
Sele
ct) a
nd D
enta
l/Vis
ion,
a m
anag
ed c
are
disc
ount
, bas
ed o
n th
e ty
pe o
f man
aged
car
e ar
rang
emen
ts a
n or
gani
zatio
n ha
s w
ith it
s pr
ovid
ers,
is in
clud
ed to
refle
ct th
e re
duct
ion
in th
e un
certa
inty
abo
ut fu
ture
cla
im
paym
ents
attr
ibut
able
to th
e m
anag
ed c
are
arra
ngem
ents
. The
dis
coun
t fac
tor
is f
rom
Col
umn
(3),
Line
(17
) of
the
Man
aged
Car
e Cr
edit
Cal
cula
tion
page
. An
aver
age
fact
or b
ased
on
the
com
bine
d re
sults
of t
hese
thre
e ca
tego
ries i
s use
d fo
r all
thre
e.
For S
tand
-Alo
ne M
edic
are
Part
D C
over
age,
a s
epar
ate
man
aged
car
e di
scou
nt (o
r fed
eral
pro
gram
cre
dit)
is in
clud
ed to
refle
ct o
nly
the
redu
ctio
n in
unc
erta
inty
abo
ut
futu
re c
laim
s pay
men
ts a
ttrib
utab
le to
fede
ral r
isk
arra
ngem
ents
. The
dis
coun
t fac
tor i
s fro
m C
olum
n (4
), Li
ne (1
7) o
f the
Man
aged
Car
e C
redi
t Cal
cula
tion
page
.
Ther
e is
no
disc
ount
giv
en fo
r the
Oth
er H
ealth
and
Oth
er N
on-H
ealth
line
s of b
usin
ess.
Line
(28)
RB
C A
fter M
anag
ed C
are
Dis
coun
t.Li
ne(2
6) x
Lin
e (2
7).
Line
(29)
Max
imum
Per
-Ind
ivid
ual R
isk
Afte
r Rei
nsur
ance
. Thi
s is
the
max
imum
afte
r-re
insu
ranc
e lo
ss fo
r any
sin
gle
indi
vidu
al. W
here
spe
cific
sto
p-lo
ss re
insu
ranc
e pr
otec
tion
is in
pla
ce, t
he m
axim
um p
er-in
divi
dual
risk
afte
r rei
nsur
ance
is e
qual
to th
e hi
ghes
t atta
chm
ent p
oint
on
such
stop
-loss
rein
sura
nce,
subj
ect t
o th
e fo
llow
ing:
*W
here
cov
erag
e un
der t
he s
top-
loss
pro
tect
ion
(plu
s re
tent
ion)
with
the
high
est a
ttach
men
t poi
nt is
cap
ped
at le
ss th
an $
750,
000
per m
embe
r, th
e m
axim
um
reta
ined
loss
will
be
equa
l to
such
atta
chm
ent p
oint
plu
s the
diff
eren
ce b
etw
een
the
cove
rage
(plu
s ret
entio
n) a
nd $
750,
000.
*
Whe
re th
e st
op-lo
ss la
yer i
s sub
ject
to p
artic
ipat
ion
by th
e re
porti
ng e
ntity
, the
max
imum
reta
ined
risk
as c
alcu
late
d ab
ove
will
be
incr
ease
d by
the
repo
rting
en
tity’
s par
ticip
atio
n in
the
stop
-loss
laye
r (up
to $
750,
000
less
rete
ntio
n).
If th
ere
is n
o sp
ecifi
c st
op-lo
ss o
r rei
nsur
ance
in p
lace
, ent
er $
9,99
9,99
9.
Exam
ples
of t
he c
alcu
latio
n ar
e pr
esen
ted
belo
w:
EXA
MPL
E 1
(Rep
ortin
g en
tity
prov
ides
Com
preh
ensi
ve C
are)
:
H
ighe
st A
ttach
men
t Poi
nt (R
eten
tion)
$1
00,0
00
R
eins
uran
ce C
over
age
90
% o
f $50
0,00
0 in
exc
ess o
f $10
0,00
0
Max
imum
rein
sure
d co
vera
ge
$600
,000
($10
0,00
0 +
$500
,000
)
M
axim
um R
et. R
isk
=
$1
00,0
00
ded
uctib
le
+ $1
50,0
00
($75
0,00
0 –
$600
,000
)
+
$ 5
0,00
0
(10%
of (
$600
,000
– $
100,
000)
cov
erag
e la
yer)
=
$300
,000
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
24
10/2
0/20
17
EXA
MPL
E 2
(Rep
ortin
g en
tity
prov
ides
Com
preh
ensi
ve C
are)
:
H
ighe
st A
ttach
men
t Poi
nt (R
eten
tion)
$
75,0
00
R
eins
uran
ce C
over
age
90
% o
f $1,
000,
000
in e
xces
s of $
75,0
00
M
axim
um re
insu
red
cove
rage
$1
,075
,000
($75
,000
+ $
1,00
0,00
0)
M
axim
um R
et. R
isk
=
$
75,
000
ded
uctib
le
+
0
($
750,
000
– $1
,075
,000
)
+
$ 6
7,50
0 (1
0% o
f ($7
50,0
00 –
$75
,000
)) c
over
age
laye
r)
= $1
42,5
00
Line
(30)
Alte
rnat
e R
isk
Cha
rge.
This
is tw
ice
the
amou
nt in
Lin
e (2
9) fo
r C
olum
ns (1
), (2
), (3
) and
(5)
and
Col
umn
(4) i
s six
tim
es th
e am
ount
in L
ine
(29)
, sub
ject
to a
m
axim
um o
f $1,
500,
000
for C
olum
n (1
), $5
0,00
0 fo
r Col
umns
(2),
(3) a
nd (5
) and
$15
0,00
0 fo
r Col
umn
(4).
Col
umn
(6) i
s exc
lude
d fr
om th
is c
alcu
latio
n.Li
ne (3
1) A
ltern
ate
Ris
k A
djus
tmen
t.Th
is li
ne s
how
s th
e la
rges
t val
ue in
Lin
e (3
0) fo
r the
col
umn
and
all c
olum
ns le
ft of
the
colu
mn.
Col
umn
(6) i
s ex
clud
ed fr
om th
is
calc
ulat
ion.
Line
(32)
Net
Alte
rnat
e R
isk
Cha
rge.
This
is th
e am
ount
in L
ine
(30)
, les
s the
am
ount
in th
e pr
evio
us c
olum
n of
Lin
e (3
1), b
ut n
ot le
ss th
an z
ero.
Col
umn
(6) i
s ex
clud
ed
from
this
cal
cula
tion.
Line
(33)
Net
Und
erw
ritin
g R
isk
RB
C.Th
is is
the
max
imum
of L
ine
(28)
and
Lin
e (3
2) fo
r eac
h of
Col
umns
(1) t
hrou
gh (5
). Th
is is
the
amou
nt in
Lin
e (2
6), C
olum
n (6
).Th
e am
ount
in C
olum
n (7
) is t
he su
m o
f the
val
ues i
n C
olum
ns (1
) thr
ough
(6).
Foot
note
1a:
If
your
com
pany
is
unab
le t
o co
mpl
ete
this
sch
edul
e, p
leas
e pr
ovid
e an
exp
lana
tion.
If
the
com
pany
is
unab
le t
o pr
ovid
e a
brea
kout
of
the
com
pany
’s
prem
ium
s, cl
aim
s an
d lo
ss ra
tio b
y in
divi
dual
, sm
all g
roup
or l
arge
gro
up p
lan
type
as
indi
cate
d in
thes
e in
stru
ctio
ns, a
n ex
plan
atio
n sh
ould
be
prov
ided
as
to w
hy th
e co
mpa
ny c
anno
t pro
vide
this
info
rmat
ion.
Foot
note
1b:
If
your
com
pany
allo
cate
d Li
nes
(4)
and
(15)
into
Lin
es (
1) th
roug
h (3
) an
d (9
) th
roug
h (1
4), d
escr
ibe
the
basi
s of
the
allo
catio
n. D
escr
ibe
the
basi
s th
e co
mpa
ny u
sed
to a
lloca
te t
he v
alue
s in
Lin
es (
4) a
nd (
15)
into
the
thre
e m
arke
t se
gmen
t lin
es. F
or e
xam
ple:
The
com
pany
use
d its
wor
k pa
pers
for
com
plet
ing
the
Supp
lem
enta
l Hea
lth C
are
Exhi
bit t
o al
loca
te th
e ea
rned
pre
miu
m in
Lin
e (4
) and
incu
rred
cla
ims i
n Li
ne (1
5) b
y th
e th
ree
mar
ket s
egm
ents
def
ined
in th
e A
CA
.
Foot
note
1c:
Doe
s th
e al
loca
tion
basi
s re
flect
est
imat
ed im
pact
s of
the
AC
A r
eins
uran
ce, r
isk
adju
stm
ents
and
ris
k co
rrid
or?
The
foot
note
rec
ogni
zes
the
pote
ntia
l tha
t es
timat
es o
f the
rece
ivab
les
and
paya
bles
with
resp
ect t
o th
e A
CA p
rogr
ams
iden
tifie
d as
rein
sura
nce,
risk
adj
ustm
ent a
nd ri
sk c
orrid
ors
may
not
be
poss
ible
or m
ay b
e m
isle
adin
g in
this
info
rmat
iona
l pag
e. If
the
com
pany
is c
once
rned
that
the
valu
es m
ay b
e m
isle
adin
g, it
may
wis
h to
hig
hlig
ht th
is c
once
rn in
the
foot
note
.
Foot
note
2: P
leas
e ex
plai
n ho
w y
our c
ompa
ny d
efin
es ”
smal
l gro
up”
for t
he p
urpo
ses o
f thi
s for
m a
nd w
hat t
he so
urce
of y
our c
ompa
ny’s
dat
a is
; i.e
., do
es y
our c
ompa
ny
use
the
fede
ral d
efin
ition
, the
def
initi
on o
f eac
h st
ate
the
com
pany
is d
oing
bus
ines
s in,
or a
ny o
ther
met
hodo
logy
for d
efin
ing
“sm
all g
roup
.”
Foot
note
3: L
ist t
he p
erce
ntag
e of
indi
vidu
al p
rem
ium
s ear
ned
that
are
writ
ten
insi
de o
f the
exc
hang
e (a
)___
____
__ a
nd th
e pe
rcen
tage
of i
ndiv
idua
l pre
miu
ms e
arne
d th
at a
re w
ritte
n ou
tsid
e of
the
exch
ange
(b)_
____
____
_. L
ist t
he p
erce
ntag
e of
indi
vidu
al in
curr
ed c
laim
s on
polic
ies w
ritte
n in
side
of t
he e
xcha
nge
(c)_
____
____
and
the
perc
enta
ge o
f ind
ivid
ual i
ncur
red
clai
ms o
n po
licie
s writ
ten
outsi
de o
f the
exc
hang
e (d
)___
____
___.
The
com
pany
shou
ld p
rovi
de th
e pe
rcen
tage
of i
ndiv
idua
l pre
miu
ms
earn
ed in
side
and
out
side
of t
he e
xcha
nge
repo
rted
in L
ine
(1),
Col
umn
(1) i
n Fo
otno
te 3
(a) a
nd 3
(b),
and
the
perc
enta
ge o
f ind
ivid
ual i
ncur
red
clai
ms o
n po
licie
s writ
ten
insi
de a
nd o
utsi
de o
f the
exc
hang
e in
Lin
e (9
), C
olum
n (1
) in
Foot
note
3(c
) and
3(d
), th
e su
m o
f Fo
otno
te 3
(a) a
nd 3
(b) s
houl
d eq
ual 1
00%
and
the
sum
of F
ootn
ote
3(c)
an
d 3(
d) sh
ould
equ
al 1
00%
. The
foot
note
shou
ld n
ot b
e le
ft bl
ank.
© 1
998-
2017
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iona
l Ass
ocia
tion
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nce
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sion
ers
25
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17
Foot
note
4: I
f you
r com
pany
had
to a
lloca
te th
e ac
crua
ls fo
r pre
miu
ms
and
clai
ms
insi
de a
nd o
utsi
de o
f the
exc
hang
es in
clud
ed in
Foo
tnot
e 3,
exp
lain
the
met
hodo
logy
th
at y
our c
ompa
ny u
sed
to a
lloca
te th
ese
accr
uals
. Pro
vide
an
expl
anat
ion
of th
e m
etho
dolo
gy u
sed
to a
lloca
te th
e ac
crua
ls fo
r pre
miu
ms a
nd c
laim
s.
OT
HE
R U
ND
ER
WR
ITIN
G R
ISK
– L
(19)
TH
RO
UG
H L
(42)
X
R01
4–X
R01
6
In a
dditi
on to
the
gene
ral r
isk
of fl
uctu
atio
ns in
the
clai
ms
expe
rienc
e, th
ere
is a
n ad
ditio
nal r
isk
gene
rate
d w
hen
repo
rting
ent
ities
gua
rant
ee ra
tes
for e
xten
ded
perio
ds
beyo
nd o
ne y
ear.
If r
ate
guar
ante
es a
re e
xten
ded
betw
een
15 a
nd 3
6 m
onth
s fr
om p
olic
y in
cept
ion,
a f
acto
r of
0.0
24 is
app
lied
agai
nst t
he d
irect
pre
miu
ms
earn
ed f
or
thos
e gu
aran
teed
pol
icie
s. W
here
a ra
te g
uara
nty
exte
nds
beyo
nd 3
6 m
onth
s, th
e fa
ctor
is in
crea
sed
to 0
.064
. Thi
s ca
lcul
atio
n on
ly a
pplie
s to
thos
e lin
es o
f acc
iden
t and
he
alth
bus
ines
s, w
hich
inc
lude
a m
edic
al t
rend
ris
k, (
i.e.,
Com
preh
ensi
ve M
edic
al,
Med
icar
e Su
pple
men
t, D
enta
l/Vis
ion,
Sta
nd-A
lone
Med
icar
e Pa
rt D
Cov
erag
e,
Supp
lem
enta
l ben
efits
with
in M
edic
are
Part
D C
over
age,
Sto
p-Lo
ss, a
nd M
inim
um P
rem
ium
). Pr
emiu
ms
ente
red
shou
ld b
e ea
rned
pre
miu
m fo
r the
cur
rent
cal
enda
r yea
r pe
riod
and
not f
or th
e en
tire
perio
d of
the
rate
gua
rant
ees.
Prem
ium
am
ount
s sho
uld
be sh
own
net o
f rei
nsur
ance
onl
y w
hen
the
rein
sura
nce
cede
d pr
emiu
m is
als
o su
bjec
t to
the
sam
e ra
te g
uara
ntee
.
A s
epar
ate
risk
fact
or h
as b
een
esta
blis
hed
to re
cogn
ize
the
redu
ced
risk
asso
ciat
ed w
ith s
afeg
uard
s bu
ilt in
to th
e Fe
dera
l Em
ploy
ees
Hea
lth B
enef
it Pr
ogra
m (F
EHB
P)
crea
ted
unde
r Se
ctio
n 89
09(f
)(1)
of
Title
5 o
f th
e U
nite
d St
ates
Cod
e an
d TR
ICA
RE
busi
ness
. C
laim
s in
curr
ed a
re m
ultip
lied
by t
wo
perc
ent
to d
eter
min
e to
tal
unde
rwrit
ing
RB
C o
n th
is b
usin
ess.
The
Am
eric
an A
cade
my
of A
ctua
ries
subm
itted
a r
epor
t to
the
Hea
lth R
isk-
Bas
ed C
apita
l (E
) Wor
king
Gro
up in
201
6 to
app
ly a
tier
ed r
isk
fact
or a
ppro
ach
toth
e St
op-L
oss
Prem
ium
. The
pre
miu
ms
for t
his
cove
rage
sho
uld
not b
e in
clud
ed w
ithin
Com
preh
ensi
ve M
edic
al. I
t is
not e
xpec
ted
that
the
trans
fer o
f ris
k th
roug
h th
e va
rious
man
aged
car
e cr
edits
will
redu
ce th
e ris
k of
sto
p-lo
ss c
over
age.
Med
ical
Sto
p-L
oss
exhi
bits
a m
uch
high
er v
aria
bilit
y th
an C
ompr
ehen
sive
Med
ical
.A fa
ctor
of
35
perc
ent w
ill b
e ap
plie
d to
the
first
$25
,000
,000
in p
rem
ium
and
a fa
ctor
of 2
5 pe
rcen
t will
be
appl
ied
to p
rem
ium
in e
xces
s of $
25,0
00,0
00.
Line
(22.
1) S
uppl
emen
tal B
enef
its w
ithin
Stan
d-A
lone
Med
icar
e Pa
rt D
Cov
erag
e.A
sepa
rate
risk
fact
or h
as b
een
esta
blis
hed
to re
cogn
ize
the
diff
eren
t ris
k (a
s des
crib
ed
in A
ppen
dix
2) fo
r the
incu
rred
cla
ims a
ssoc
iate
d w
ith th
e be
nefic
iarie
s for
thes
e su
pple
men
tal d
rug
bene
fits.
Line
s (2
3) th
roug
h (2
9) D
isab
ility
Inc
ome.
Dis
abili
ty I
ncom
e Pr
emiu
ms
are
to b
e se
para
tely
ent
ered
dep
endi
ng u
pon
cate
gory
(In
divi
dual
and
Gro
up).
For
Indi
vidu
al
Dis
abili
ty In
com
e, a
furth
er sp
lit is
bet
wee
n no
ncan
cella
ble
(NC
) or o
ther
(gua
rant
eed
rene
wab
le, e
tc.).
For
Gro
up D
isab
ility
Inco
me,
the
furth
er sp
lits a
re b
etw
een
Cre
dit
Mon
thly
Bal
ance
, Cre
dit S
ingl
e Pr
emiu
m (w
ith a
dditi
onal
rese
rves
), C
redi
t Sin
gle
Prem
ium
(with
out a
dditi
onal
rese
rves
), G
roup
Lon
g-Te
rm (b
enef
it pe
riods
of t
wo
year
s or
long
er) a
nd G
roup
Sho
rt-Te
rm (b
enef
it pe
riods
less
than
two
year
s). T
he R
BC
fact
ors
vary
by
the
amou
nt o
f pre
miu
m re
porte
d su
ch th
at a
hig
her f
acto
r is
appl
ied
to
amou
nts
belo
w $
50,0
00,0
00 fo
r sim
ilar t
ypes
. In
dete
rmin
ing
the
prem
ium
s su
bjec
t to
the
high
er fa
ctor
s, In
divi
dual
Dis
abili
ty In
com
e N
C a
nd O
ther
are
com
bine
d.A
ll ty
pes o
f Gro
up a
nd C
redi
t Dis
abili
ty In
com
e ar
e co
mbi
ned
in a
diff
eren
t cat
egor
y fr
om In
divi
dual
.
Line
s (3
0) th
roug
h (3
8) L
ong
Term
Car
e. L
ong-
Term
Car
e In
sura
nce
(LTC
I) P
rem
ium
s ar
e us
ed to
det
erm
ine
both
a ra
te ri
sk a
nd th
e m
orbi
dity
risk
. The
rate
risk
rela
tes
to a
ll N
onca
ncel
labl
e LT
CI p
rem
ium
s. Th
e m
orbi
dity
risk
is p
artia
lly a
pplie
d di
rect
ly to
pre
miu
m w
ith a
hig
her f
acto
r (10
per
cent
) app
lied
to a
mou
nts
up to
$50
,000
,000
an
d a
low
er f
acto
r (3
per
cent
) ap
plie
d to
pre
miu
ms
in e
xces
s of
$50
,000
,000
. In
addi
tion,
the
earn
ed p
rem
ium
s an
d in
curr
ed c
laim
s fo
r th
e la
st tw
o ye
ars
are
used
to
dete
rmin
e an
ave
rage
loss
ratio
(inc
urre
d cl
aim
s di
vide
d by
ear
ned
prem
ium
s). T
his
aver
age
loss
ratio
tim
es th
e cu
rren
t yea
r’s
prem
ium
is c
alle
d A
djus
ted
LTC
I Cla
ims
for R
BC
. A h
ighe
r fac
tor (
25 p
erce
nt) i
s ap
plie
d to
cla
ims
up to
$35
,000
,000
and
a lo
wer
fact
or (8
per
cent
) is
appl
ied
to c
laim
s ab
ove
$35,
000,
000.
In c
erta
in s
ituat
ions
w
here
loss
ratio
s can
not b
e us
ed b
ecau
se o
ne o
f the
val
ues i
s zer
o or
neg
ativ
e, th
e cu
rren
t yea
r’s i
ncur
red
clai
ms a
re u
sed.
In a
situ
atio
n w
here
the
curr
ent y
ear’
s pre
miu
m
is n
ot p
ositi
ve, h
ighe
r fa
ctor
s ar
e ap
plie
d to
cur
rent
yea
r’s
incu
rred
cla
ims
to r
efle
ct th
e la
ck o
f a
prem
ium
-bas
ed R
BC
. The
RB
C f
or L
TCI
is th
e su
m o
f th
ese
thre
e ca
lcul
atio
ns.
© 1
998-
2017
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iona
l Ass
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tion
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nce
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ers
26
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17
Line
(39)
Lim
ited
Ben
efit
Plan
s.Th
ere
is a
fact
or fo
r cer
tain
type
s of
Lim
ited
Ben
efit
cove
rage
(Hos
pita
l Ind
emni
ty, w
hich
incl
udes
a p
er d
iem
for i
nten
sive
car
e fa
cilit
y st
ays,
and
Spec
ified
Dis
ease
) whi
ch in
clud
es b
oth
a pe
rcen
t of e
arne
d pr
emiu
m o
n su
ch in
sura
nce
(3.5
per
cent
) and
a fl
at d
olla
r am
ount
($50
,000
) to
refle
ct th
e hi
gher
va
riabi
lity
of sm
all a
mou
nts o
f bus
ines
s.
Line
(40)
Acc
iden
tal D
eath
and
Dis
mem
berm
ent.
Ther
e is
a fa
ctor
for A
ccid
enta
l Dea
th a
nd D
ism
embe
rmen
t (A
D&
D) i
nsur
ance
(whe
re a
sing
le lu
mp
sum
is p
aid)
whi
ch
depe
nds o
n se
vera
l ite
ms:
1.Th
ree
times
the
max
imum
am
ount
of r
etai
ned
risk
for a
ny si
ngle
cla
im;
2.$3
00,0
00 if
3 ti
mes
the
max
imum
am
ount
of r
etai
ned
risk
is la
rger
than
$30
0,00
0;
3.5.
5 pe
rcen
t of e
arne
d pr
emiu
m to
the
exte
nt th
e pr
emiu
m fo
r AD
&D
is le
ss th
an o
r equ
al to
$10
,000
,000
; and
4.
1.5
perc
ent o
f ear
ned
prem
ium
in e
xces
s of $
10,0
00,0
00.
Ther
e ar
e pl
aces
for
rep
ortin
g th
e to
tal
amou
nt o
f ea
rned
pre
miu
m a
nd m
axim
um r
etai
ned
risk
on a
ny s
ingl
e cl
aim
. Th
e ac
tual
RB
C a
mou
nt w
ill b
e ca
lcul
ated
au
tom
atic
ally
as t
he le
sser
of 1
and
2. T
hat r
esul
t is t
hen
adde
d to
3 a
nd 4
.
Line
(41
) O
ther
Acc
iden
t.Th
ere
is a
fac
tor
for
Oth
er A
ccid
ent c
over
age
that
pro
vide
s fo
r an
y ac
cide
nt-b
ased
con
tinge
ncy
othe
r th
an th
ose
cont
aine
d in
Lin
e 40
. For
ex
ampl
e, th
is li
ne s
houl
d co
ntai
n al
l the
pre
miu
m f
or p
olic
ies
that
pro
vide
cov
erag
e fo
r ac
cide
nt o
nly
disa
bilit
y or
acc
iden
t onl
y ho
spita
l ind
emni
ty. T
he p
rem
ium
for
po
licie
s tha
t con
tain
AD
&D
in a
dditi
on to
oth
er a
ccid
ent o
nly
bene
fits s
houl
d be
show
n on
this
line
.
Line
(42)
Pre
miu
m S
tabi
lizat
ion
Res
erve
s.Pr
emiu
m st
abili
zatio
n re
serv
es a
re fu
nds h
eld
by th
e co
mpa
ny in
ord
er to
stab
ilize
the
prem
ium
a g
roup
pol
icyh
olde
r mus
t pay
fr
om y
ear t
o ye
ar. U
sual
ly e
xper
ienc
e-ra
ting
refu
nds a
re a
ccum
ulat
ed in
such
a re
serv
e so
that
they
can
be
draw
n up
on in
the
even
t of p
oor f
utur
e ex
perie
nce.
Thi
s red
uces
th
e in
sure
r’s r
isk.
For h
ealth
insu
ranc
e, 5
0 pe
rcen
t of t
he p
rem
ium
sta
biliz
atio
n re
serv
es h
eld
in th
e an
nual
sta
tem
ent a
s a
liabi
lity
(not
as a
ppro
pria
ted
surp
lus)
are
per
mitt
ed a
s an
off
set u
p to
the
amou
nt o
f ris
k-ba
sed
capi
tal.
The
50 p
erce
nt fa
ctor
was
cho
sen
to a
ppro
xim
ate
the
porti
on o
f pre
miu
m s
tabi
lizat
ion
rese
rves
that
wou
ld b
e an
app
ropr
iate
off
set i
f th
e fo
rmul
a w
ere
appl
ied
on a
con
tract
by
cont
ract
bas
is, a
nd th
e re
serv
e of
fset
wer
e lim
ited
to th
e am
ount
of r
isk-
base
d ca
pita
l req
uire
d fo
r eac
h co
ntra
ct.
Com
pani
es m
ust l
ist e
ach
grou
p ha
ving
five
per
cent
or m
ore
of th
e to
tal p
rem
ium
stab
iliza
tion
rese
rve
of th
e re
porti
ng e
ntity
. All
othe
r gro
ups m
ay b
e su
mm
ariz
ed o
n on
e lin
e an
d la
bele
d as
var
ious
.
No
cred
it is
giv
en h
ere
for
prem
ium
sta
biliz
atio
n re
serv
es h
eld
for
FEH
BP
and
TRIC
AR
E co
vera
ge, b
ecau
se th
at c
over
age
is a
lread
y su
bjec
t to
a le
sser
per
cent
age
of
prem
ium
in th
e un
derw
ritin
g ris
k ca
lcul
atio
n to
ref
lect
its
redu
ced
leve
l of
risk.
Sim
ilarly
, no
cred
it is
giv
en h
ere
for
any
amou
nts
held
in c
onne
ctio
n w
ith s
tand
-alo
ne
Med
icar
e Pa
rt D
Cov
erag
e (i.
e., a
mou
nts
held
as
liabi
litie
s to
the
fede
ral g
over
nmen
t und
er th
e ris
k-co
rrid
or m
echa
nism
), si
nce
Med
icar
e Pa
rt D
Cov
erag
e pr
emiu
m is
al
read
y su
bjec
t to
a le
sser
fact
or in
the
unde
rwrit
ing
risk
calc
ulat
ion
to re
flect
the
redu
ced
net l
evel
of r
isk.
Am
ount
s hel
d as
pre
paym
ents
from
the
fede
ral g
over
nmen
t for
re
insu
ranc
e co
vera
ge o
r low
-inco
me
subs
idy
(cos
t-sha
ring
porti
on) u
nder
Med
icar
e Pa
rt D
Cov
erag
e ar
e no
t con
side
red
prem
ium
stab
iliza
tion
rese
rves
as t
hey
rela
te to
an
unin
sure
d pl
an.
As
such
, the
com
pany
mus
t exc
lude
all
amou
nts
rela
ting
to F
EHB
P, T
RIC
AR
E or
sta
nd-a
lone
Med
icar
e Pa
rt D
Cov
erag
e in
det
erm
inin
g th
e am
ount
of
rese
rves
to b
e re
porte
d he
re.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
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nce
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27
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17
UN
DE
RW
RIT
ING
RIS
K –
MA
NA
GE
D C
AR
E C
RE
DIT
X
R01
7
The
effe
ct o
f man
aged
car
e ar
rang
emen
ts o
n th
e va
riabi
lity
of u
nder
writ
ing
resu
lts is
the
fund
amen
tal d
iffer
ence
bet
wee
n he
alth
ent
ities
and
pur
e in
dem
nity
car
riers
. The
m
anag
ed c
are
cred
it is
use
d to
redu
ce th
e R
BC
requ
irem
ent f
or e
xper
ienc
e flu
ctua
tions
. It i
s im
porta
nt to
und
erst
and
that
the
man
aged
car
e cr
edit
is b
ased
on
the
redu
ctio
n in
unc
erta
inty
abo
ut f
utur
e cl
aim
s pa
ymen
ts, n
ot o
n an
y re
duct
ion
in th
e ac
tual
leve
l of
cost
. Tho
se m
anag
ed c
are
arra
ngem
ents
that
hav
e th
e gr
eate
st r
educ
tion
in th
e un
certa
inty
of c
laim
pay
men
ts re
ceiv
e th
e gr
eate
st c
redi
t, w
hile
thos
e th
at h
ave
less
eff
ect o
n th
e pr
edic
tabi
lity
of c
laim
s pay
men
ts e
ngen
der l
ess o
f a d
isco
unt.
Ther
e ar
e cu
rren
tly f
ive
leve
ls o
f m
anag
ed c
are
that
are
use
d in
the
form
ula,
oth
er th
an f
or M
edic
are
Part
D C
over
age,
alth
ough
in th
e fu
ture
as
new
man
aged
car
e ar
rang
emen
ts e
volv
e, th
e nu
mbe
r of c
ateg
orie
s may
incr
ease
or n
ew a
rran
gem
ents
may
be
adde
d to
the
exis
ting
cate
gorie
s. Th
e m
anag
ed c
are
cate
gorie
s are
:
*C
ateg
ory
0 –
Arr
ange
men
ts n
ot In
clud
ed in
Oth
er C
ateg
orie
s *
Cat
egor
y 1
– C
ontra
ctua
l Fee
Pay
men
ts
*C
ateg
ory
2 –
Bon
us /
With
hold
Arr
ange
men
ts
*C
ateg
ory
3 –
Cap
itatio
n
*C
ateg
ory
4 –
Non
-Con
tinge
nt E
xpen
ses a
nd A
ggre
gate
Cos
t Arr
ange
men
ts a
nd C
erta
in P
SO C
apita
ted
Arr
ange
men
ts
For M
edic
are
Part
D C
over
age,
the
redu
ctio
n in
unc
erta
inty
com
es fr
om tw
o fe
dera
l sup
ports
. The
rein
sura
nce
cove
rage
is o
ptio
nal i
n th
at a
pla
n sp
onso
r may
ele
ct to
pa
rtici
pate
in th
e Pa
rt D
Pay
men
t Dem
onst
ratio
n. T
he ri
sk c
orrid
or p
rote
ctio
n is
exp
ecte
d to
hav
e le
ss im
pact
afte
r the
firs
t few
yea
rs. T
o al
low
flex
ibili
ty w
ithin
the
RB
C
form
ula,
Lin
es (1
0) th
roug
h (1
3) w
ill b
e us
ed to
giv
e cr
edit
for t
he p
rogr
ams
in w
hich
the
plan
spon
sor p
artic
ipat
es. W
hile
all
PDPs
will
hav
e fo
rmul
arie
s an
d m
ay u
tiliz
e ot
her m
etho
ds to
redu
ce u
ncer
tain
ty, f
or th
e ne
ar fu
ture
, no
othe
r man
aged
car
e cr
edits
are
allo
wed
for t
his c
over
age.
The
man
aged
car
e cr
edit
is b
ased
on
the
perc
enta
ge o
f pai
d cl
aim
s th
at fa
ll in
to e
ach
of th
ese
cate
gorie
s. To
tal c
laim
s pa
ymen
ts a
re a
lloca
ted
amon
g th
ese
man
aged
car
e “b
ucke
ts”
to d
eter
min
e th
e w
eigh
ted
aver
age
disc
ount
, whi
ch is
then
use
d to
redu
ce th
e U
nder
writ
ing
Ris
k-Ex
perie
nce
Fluc
tuat
ion
RB
C. P
aid
clai
ms
are
used
inst
ead
of
incu
rred
cla
ims
due
to th
e va
riabi
lity
of r
eser
ves
(unp
aid
clai
ms)
in in
curr
ed c
laim
am
ount
s an
d th
e di
ffic
ulty
in a
lloca
ting
rese
rves
(un
paid
cla
ims)
by
man
aged
car
e ca
tego
ry.
In s
ome
inst
ance
s, cl
aim
pay
men
ts m
ay f
it in
to m
ore
than
one
cat
egor
y. I
f th
at o
ccur
s, en
ter
the
clai
m p
aym
ents
int
o th
e hi
ghes
t ap
plic
able
cat
egor
y. C
LAIM
PA
YM
ENTS
CA
N O
NLY
BE
ENTE
RED
IN
TO O
NE
OF
THES
E C
ATE
GO
RIE
S! T
he to
tal o
f th
e cl
aim
pay
men
ts r
epor
ted
in th
e M
anag
ed C
are
Cre
dit C
alcu
latio
n pa
ge sh
ould
equ
al th
e to
tal y
ear’
s pai
d cl
aim
s.
Line
(1) –
Cat
egor
y 0
– A
rran
gem
ents
not
Incl
uded
in O
ther
Cat
egor
ies.
Ther
e is
a z
ero
man
aged
car
e cr
edit
for c
laim
pay
men
ts in
this
cat
egor
y, w
hich
incl
udes
:
Fee
for s
ervi
ce (c
harg
es).
Dis
coun
ted
FFS
(bas
ed u
pon
char
ges)
. U
sual
Cus
tom
ary
and
Rea
sona
ble
(UC
R) S
ched
ules
. R
elat
ive
Val
ue S
cale
s (R
VS)
whe
re n
eith
er p
aym
ent b
ase
nor R
V fa
ctor
is fi
xed
by c
ontra
ct o
r whe
re th
ey a
re fi
xed
by c
ontra
ct fo
r one
yea
r or l
ess.
Stop
-loss
pay
men
ts b
y a
heal
th e
ntity
to it
s pro
vide
rs th
at a
re c
apita
ted
or su
bjec
t to
with
hold
/ince
ntiv
e pr
ogra
ms.
Ret
roac
tive
paym
ents
to
capi
tate
d pr
ovid
ers
or i
nter
med
iarie
s w
heth
er b
y ca
pita
tion
or o
ther
pay
men
t m
etho
d (e
xclu
ding
ret
roac
tive
with
hold
s la
ter
rele
ased
to th
e pr
ovid
er a
nd re
troac
tive
paym
ents
mad
e so
lely
bec
ause
of a
cor
rect
ion
to th
e nu
mbe
r of m
embe
rs w
ithin
the
capi
tate
d ag
reem
ent).
C
apita
tion
paid
to p
rovi
ders
or
inte
rmed
iarie
s th
at h
ave
rece
ived
ret
roac
tive
paym
ents
for
pre
viou
s ye
ars
(incl
udin
g bo
nus
arra
ngem
ents
on
capi
tatio
n pr
ogra
ms)
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
28
10/2
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17
This
am
ount
shou
ld e
qual
Exh
ibit
7, P
art 1
, Col
umn
1, L
ine
5of
the
annu
al st
atem
ent e
xclu
ding
Sta
nd-A
lone
Med
icar
e Pa
rt D
bus
ines
s rep
orte
d in
Lin
es (1
2) a
nd (1
3).
Line
(2) –
Cat
egor
y 1
– Pa
ymen
ts M
ade
Acc
ordi
ng to
Con
tract
ual A
rran
gem
ents.
The
re is
a 1
5 pe
rcen
t man
aged
car
e cr
edit
for p
aym
ents
incl
uded
in th
is c
ateg
ory:
Hos
pita
l per
die
ms,
DR
Gs o
r oth
er h
ospi
tal c
ase
rate
s. N
on-a
djus
tabl
e pr
ofes
sion
al c
ase
and
glob
al ra
tes.
Prov
ider
fee
sche
dule
s. R
VS
whe
re th
e pa
ymen
t bas
e an
d R
V fa
ctor
are
fixe
d by
con
tract
for m
ore
than
one
yea
r. A
mbu
lato
ry p
aym
ent c
lass
ifica
tions
(APC
s).
This
am
ount
shou
ld e
qual
Exh
ibit
7, P
art 1
, Col
umn
1, L
ine
6 of
the
annu
al st
atem
ente
xclu
ding
Sta
nd-A
lone
Med
icar
e Pa
rt D
bus
ines
s rep
orte
d in
Lin
es (1
2) a
nd (1
3).
Line
(3) -
Cat
egor
y 2a
- Pa
ymen
ts M
ade
Subj
ect t
o W
ithho
lds
or B
onus
es W
ith N
o O
ther
Man
aged
Car
e A
rran
gem
ents.
Thi
s ca
tego
ry m
ay in
clud
e bu
sine
ss th
at w
ould
ha
ve o
ther
wis
e fit
into
Cat
egor
y 0.
Tha
t is,
ther
e m
ay b
e a
bonu
s/w
ithho
ld a
rran
gem
ent w
ith a
pro
vide
r who
is re
imbu
rsed
bas
ed o
n a
UC
R sc
hedu
le (C
ateg
ory
0).
The
max
imum
Cat
egor
y 2a
man
aged
car
e cr
edit
is 2
5 pe
rcen
t. Th
e cr
edit
is b
ased
upo
n a
calc
ulat
ion
that
det
erm
ines
the
ratio
of w
ithho
lds
retu
rned
and
bon
uses
pai
d to
pr
ovid
ers
durin
g th
e pr
ior y
ear t
o to
tal w
ithho
lds
and
bonu
ses
avai
labl
e to
the
prov
ider
s du
ring
that
yea
r. Th
at ra
tio is
then
mul
tiplie
d by
the
aver
age
prov
ider
with
hold
ra
tio fo
r the
prio
r yea
r to
dete
rmin
e th
e cu
rren
t yea
r’s
Cat
egor
y 2a
man
aged
car
e cr
edit
fact
or. B
onus
pay
men
ts th
at a
re n
ot re
late
d to
fina
ncia
l res
ults
are
not
incl
uded
(e
.g.,
patie
nt sa
tisfa
ctio
n). T
here
fore
, the
cre
dit f
acto
r is e
qual
to th
e re
sult
of th
e fo
llow
ing
calc
ulat
ion:
EXA
MPL
E –
2017
Rep
ortin
g Y
ear
2016
with
hold
/ bo
nus p
aym
ents
....
......
......
......
......
......
......
......
......
......
......
......
.....
750,
000
2016
with
hold
s / b
onus
es a
vaila
ble
.....
......
......
......
......
......
......
......
......
......
......
... 1
,000
,000
A. M
CC
Fac
tor M
ultip
lier ..
......
......
......
......
......
......
......
......
......
......
......
......
......
.... 7
5% –
Elig
ible
for c
redi
t 20
16 w
ithho
lds /
bon
uses
ava
ilabl
e ....
......
......
......
......
......
......
......
......
......
......
.....
1,00
0,00
0 20
16 c
laim
s sub
ject
to w
ithho
ld -
gros
s* ...
......
......
......
......
......
......
......
......
......
..... 5
,000
,000
B
.Ave
rage
With
hold
Rat
e ....
......
......
......
......
......
......
......
......
......
......
......
......
......
. 20%
C
ateg
ory
2 M
anag
ed C
are
Cre
dit F
acto
r (A
x B
) ....
......
......
......
......
......
......
......
......
......
... 15
%
The
resu
lting
fact
or is
mul
tiplie
d by
cla
im p
aym
ents
subj
ect t
o w
ithho
ld -
net*
* in
the
curr
ent y
ear.
* T
hese
are
am
ount
s due
bef
ore
dedu
ctin
g w
ithho
ld o
r pa
ying
bon
uses
. **
The
se a
re a
ctua
l pay
men
ts m
ade
afte
r de
duct
ing
with
hold
or
payi
ng b
onus
es.
Ente
r th
e pa
id c
laim
s fo
r th
e cu
rren
t yea
r whe
re p
aym
ents
to p
rovi
ders
wer
e su
bjec
t to
with
hold
s an
d bo
nuse
s, bu
t oth
erw
ise
had
no m
anag
ed c
are
arra
ngem
ents
. Thi
s am
ount
shou
ld e
qual
Exh
ibit
7, P
art 1
, Col
umn
1, L
ine
7of
the
annu
al st
atem
ent e
xclu
ding
Sta
nd-A
lone
Med
icar
e Pa
rt D
bus
ines
s rep
orte
d in
Lin
es (1
2) a
nd (1
3).
Line
(4) –
Cat
egor
y 2b
– P
aym
ents
Mad
e Su
bjec
t to
With
hold
s or
Bon
uses
Tha
t Are
Oth
erw
ise
Man
aged
Car
e C
ateg
ory
1. C
ateg
ory
2b m
ay in
clud
e bu
sine
ss th
at w
ould
ha
ve o
ther
wis
e fit
into
Cat
egor
y 1.
Tha
t is,
ther
e m
ay b
e a
bonu
s/w
ithho
ld a
rran
gem
ent w
ith a
pro
vide
r who
is re
imbu
rsed
bas
ed o
n a
prov
ider
fee
sche
dule
(Cat
egor
y 1)
. Th
e C
ateg
ory
2 di
scou
nt fo
r cla
im p
aym
ents
that
wou
ld o
ther
wis
e qu
alify
for C
ateg
ory
1 is
the
grea
ter o
f the
Cat
egor
y 1
fact
or o
r the
cal
cula
ted
Cat
egor
y 2
fact
or.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
29
10/2
0/20
17
The
max
imum
Cat
egor
y 2b
man
aged
car
e cr
edit
is 2
5 pe
rcen
t. Th
e m
inim
um o
f C
ateg
ory
2b m
anag
ed c
are
cred
it is
15
perc
ent (
Cat
egor
y 1
cred
it fa
ctor
). Th
e cr
edit
calc
ulat
ion
is th
e sa
me
as fo
und
in th
e pr
evio
us e
xam
ple
for C
ateg
ory
2a.
Ente
r the
pai
d cl
aim
s fo
r the
cur
rent
yea
r whe
re p
aym
ents
to p
rovi
ders
wer
e su
bjec
t to
with
hold
s an
d bo
nuse
s A
ND
whe
re th
e pa
ymen
ts w
ere
mad
e ac
cord
ing
to o
ne o
f th
e co
ntra
ctua
l arr
ange
men
ts li
sted
for C
ateg
ory
1. T
his a
mou
nt sh
ould
equ
al E
xhib
it 7,
Par
t 1, C
olum
n 1,
Lin
e 8
of th
e an
nual
stat
emen
t exc
ludi
ng S
tand
-Alo
ne M
edic
are
Part
D b
usin
ess r
epor
ted
in L
ines
(12)
and
(13)
.
Line
(5) –
Cat
egor
y 3a
– C
apita
ted
Paym
ents
Dire
ctly
to P
rovi
ders
. The
re is
a m
anag
ed c
are
cred
it of
60
perc
ent f
or c
laim
s pay
men
ts in
this
cat
egor
y, w
hich
incl
udes
:
All
capi
tatio
n or
per
cent
of p
rem
ium
pay
men
ts d
irect
ly to
lice
nsed
pro
vide
rs.
Ente
r the
am
ount
of c
laim
pay
men
ts p
aid
DIR
ECTL
Y to
lice
nsed
pro
vide
rs o
n a
capi
tate
d ba
sis.
This
am
ount
shou
ld e
qual
Exh
ibit
7, P
art 1
, Col
umn
1, L
ine
1 +
Line
3of
the
annu
al st
atem
ent e
xclu
ding
Sta
nd-A
lone
Med
icar
e Pa
rt D
bus
ines
s rep
orte
d in
Lin
es (1
2) a
nd (1
3).
Line
(6)
– C
ateg
ory
3b –
Cap
itate
d Pa
ymen
ts to
Reg
ulat
ed I
nter
med
iarie
s. Th
ere
is a
man
aged
car
e cr
edit
of 6
0 pe
rcen
t for
cla
im p
aym
ents
in th
is c
ateg
ory,
whi
ch
incl
udes
:
All
capi
tatio
n or
per
cent
of p
rem
ium
pay
men
ts to
inte
rmed
iarie
s tha
t in
turn
pay
lice
nsed
pro
vide
rs.
Ente
r th
e am
ount
of
med
ical
exp
ense
cap
itatio
ns p
aid
to r
egul
ated
inte
rmed
iarie
s. A
n in
term
edia
ry is
a p
erso
n, c
orpo
ratio
n or
oth
er b
usin
ess
entit
y (n
ot li
cens
ed a
s a
med
ical
pro
vide
r) th
at a
rran
ges,
by c
ontra
cts
with
phy
sici
ans
and
othe
r lic
ense
d m
edic
al p
rovi
ders
, to
deliv
er h
ealth
ser
vice
s fo
r a
heal
th e
ntity
and
its
enro
llees
via
a
sepa
rate
con
tract
bet
wee
n th
e in
term
edia
ry a
nd th
e he
alth
ent
ity. T
his
incl
udes
aff
iliat
es o
f an
heal
th e
ntity
that
are
not
sub
ject
to R
BC
, exc
ept i
n th
ose
case
s w
here
the
heal
th e
ntity
qua
lifie
s fo
r a h
ighe
r man
aged
car
e cr
edit
beca
use
the
capi
tate
d af
filia
te e
mpl
oys
prov
ider
s an
d pa
ys th
em n
on-c
ontin
gent
sal
arie
s, an
d w
here
the
affil
iate
d in
term
edia
ry h
as a
con
tract
onl
y w
ith th
e af
filia
ted
heal
th e
ntity
. A R
egul
ated
Inte
rmed
iary
is a
n in
term
edia
ry (a
ffili
ated
or n
ot) s
ubje
ct to
sta
te re
gula
tion
and
files
the
Hea
lth R
BC
form
ula
with
the
stat
e.
Line
(7) –
Cat
egor
y 3c
– C
apita
ted
Paym
ents
to N
on-R
egul
ated
Inte
rmed
iarie
s. Th
ere
is a
man
aged
car
e cr
edit
of 6
0 pe
rcen
t for
cla
im p
aym
ents
in th
is c
ateg
ory,
whi
ch
incl
udes
:
All
capi
tatio
n or
per
cent
of
prem
ium
pay
men
ts t
o in
term
edia
ries
that
in
turn
pay
lic
ense
d pr
ovid
ers.
(Sub
ject
to
a 5
perc
ent
limita
tion
on p
aym
ents
to
prov
ider
s or
oth
er c
orpo
ratio
ns t
hat
have
no
cont
ract
ual
rela
tions
hip
with
suc
h in
term
edia
ry.
Am
ount
s gr
eate
r th
an t
he 5
per
cent
lim
itatio
n sh
ould
be
repo
rted
in C
ateg
ory
0.)
Ente
r the
am
ount
of m
edic
al e
xpen
se c
apita
tions
pai
d to
non
-reg
ulat
ed in
term
edia
ries.
IN O
RD
ER T
O Q
UA
LIFY
FO
R A
NY
OF
THE
CA
PITA
TIO
N C
ATE
GO
RIE
S, S
UC
H C
API
TATI
ON
MU
ST B
E FI
XED
(A
S A
PER
CEN
TAG
E O
F PR
EMIU
M O
R
FIX
ED D
OLL
AR
AM
OU
NT
PER
MEM
BER
) FO
R A
PER
IOD
OF
AT
LEA
ST 1
2 M
ON
THS.
Whe
re a
n ar
rang
emen
t con
tain
s a
prov
isio
n fo
r pr
ospe
ctiv
e re
visi
on
with
in a
12-
mon
th p
erio
d, th
e en
tire
arra
ngem
ent s
hall
be su
bjec
t to
a m
anag
ed c
are
cred
it th
at is
cal
cula
ted
unde
r cat
egor
y 1
for a
pro
vide
r, an
d fo
r an
inte
rmed
iary
at t
he
grea
ter o
f cat
egor
y 1
or a
cre
dit c
alcu
late
d us
ing
the
unde
rlyin
g pa
ymen
t met
hod(
s) to
the
prov
ider
s of
car
e. W
here
an
arra
ngem
ent c
onta
ins
a pr
ovis
ion
for r
etro
activ
e re
visi
ons e
ither
with
in o
r bey
ond
a 12
-mon
th p
erio
d, th
e en
tire
arra
ngem
ent s
hall
be su
bjec
t to
a m
anag
ed c
are
cred
it th
at is
cal
cula
ted
unde
r cat
egor
y 0
for b
oth
prov
ider
s an
d in
term
edia
ries.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
30
10/2
0/20
17
Line
(8) –
Cat
egor
y 4
– M
edic
al &
Hos
pita
l Exp
ense
Pai
d as
Sal
ary
to P
rovi
ders
. The
re is
a m
anag
ed c
are
cred
it of
75
perc
ent f
or c
laim
pay
men
ts in
this
cat
egor
y. O
nce
clai
m p
aym
ents
und
er th
is m
anag
ed c
are
cate
gory
are
tota
led,
any
fee
for
ser
vice
rev
enue
fro
m u
nins
ured
pla
ns (
i.e.,
ASO
or
ASC
) th
at w
as in
clud
ed o
n lin
e 7
in th
e U
nder
writ
ing
Ris
k se
ctio
n sh
ould
be
dedu
cted
bef
ore
appl
ying
the
man
aged
car
e cr
edit
fact
or. T
his c
ateg
ory
incl
udes
:
Non
-con
tinge
nt sa
larie
s to
pers
ons d
irect
ly p
rovi
ding
car
e.
The
porti
on o
f pay
men
ts to
aff
iliat
ed e
ntiti
es, w
hich
is p
asse
d on
as n
on-c
ontin
gent
sala
ries t
o pe
rson
s dire
ctly
pro
vidi
ng c
are
whe
re th
e en
tity
has a
con
tract
on
ly w
ith it
s aff
iliat
ed h
ealth
ent
ity.
All
faci
litie
s rel
ated
med
ical
exp
ense
s and
oth
er n
on-p
rovi
der m
edic
al c
osts
gen
erat
ed w
ithin
a h
ealth
faci
lity
that
is o
wne
d an
d op
erat
ed b
y th
e he
alth
ent
ity.
Agg
rega
te c
ost p
aym
ents
.
Sala
ries
paid
to
doct
ors
and
nurs
es w
hose
sol
e co
rpor
ate
purp
ose
is u
tiliz
atio
n re
view
are
als
o in
clud
ed in
thi
s ca
tego
ry i
f su
ch p
aym
ents
are
cla
ssifi
ed a
s “m
edic
al
expe
nse”
pay
men
ts (
paid
cla
ims)
rat
her
than
adm
inis
trativ
e ex
pens
es. T
he "
aggr
egat
e co
st"
met
hod
of r
eim
burs
emen
t mea
ns w
here
a h
ealth
pla
n ha
s a
reim
burs
emen
t pl
an w
ith a
cor
pora
te e
ntity
that
dire
ctly
pro
vide
s ca
re, w
here
(1) t
he h
ealth
pla
n is
con
tract
ually
requ
ired
to p
ay th
e to
tal o
pera
ting
cost
s of
the
corp
orat
e en
tity,
less
any
in
com
e to
the
entit
y fr
om o
ther
use
rs o
f se
rvic
es, a
nd (
2) th
ere
are
mut
ual u
nlim
ited
guar
ante
es o
f so
lven
cy b
etw
een
the
entit
y an
d th
e he
alth
pla
n, w
hich
put
thei
r re
spec
tive
capi
tal a
nd su
rplu
s at r
isk
in g
uara
ntee
ing
each
oth
er.
This
am
ount
sho
uld
equa
l Exh
ibit
7, P
art 1
, Col
umn
1, L
ine
9 +
Line
10
of th
e an
nual
sta
tem
ent e
xclu
ding
Sta
nd-A
lone
Med
icar
e Pa
rt D
bus
ines
s re
porte
d in
Lin
es (1
2)
and
(13)
.
Line
(9) –
Sub
-Tot
al P
aid
Cla
ims.
The
tota
l of p
aid
clai
ms
for C
ompr
ehen
sive
Med
ical
, Med
icar
e Su
pple
men
t and
Den
tal [
shou
ld e
qual
the
tota
l cla
ims
paid
for t
he y
ear
as re
porte
d in
Exh
ibit
7, P
art 1
, Col
umn
1, L
ine
13 le
ss L
ine
11 o
f the
ann
ual s
tate
men
t and
the
sum
of L
ines
(8.3
), (1
2) a
nd (1
3)on
pag
e X
R01
7 –
Und
erw
ritin
g R
isk
– M
anag
ed C
are
Cre
dit.
Line
(10
) –
Cat
egor
y 0
– N
o Fe
dera
l Rei
nsur
ance
or
Ris
k C
orrid
or P
rote
ctio
n.C
ateg
ory
0 fo
r M
edic
are
Part
D C
over
age
wou
ld b
e al
l cla
ims
durin
g a
perio
d w
here
ne
ither
the
rein
sura
nce
cove
rage
or r
isk
corr
idor
pro
tect
ion
is p
rovi
ded.
Line
(11)
– C
ateg
ory
1 –
Fede
ral R
eins
uran
ce b
ut n
o R
isk
Cor
ridor
Pro
tect
ion.
Cat
egor
y 1
for M
edic
are
Part
D C
over
age
wou
ld b
e al
l cla
ims
durin
g a
perio
d w
hen
only
th
e re
insu
ranc
e co
vera
ge is
pro
vide
d. T
his
is d
esig
ned
for s
ome
futu
re ti
me
perio
d an
d is
not
to b
e in
terp
rete
d as
incl
udin
g em
ploy
er-b
ased
Par
t D c
over
age
that
is n
ot
subj
ect t
o ris
k co
rrid
or p
rote
ctio
n.
Line
(12)
– C
ateg
ory
2a –
No
Fede
ral R
eins
uran
ce b
ut R
isk
Cor
ridor
Pro
tect
ion.
Cat
egor
y 2a
for M
edic
are
Part
D C
over
age
wou
ld b
e fo
r all
clai
ms
durin
g a
perio
d w
hen
only
the
risk
corr
idor
pro
tect
ion
is p
rovi
ded.
Line
(13)
– C
ateg
ory
3a –
Fed
eral
Rei
nsur
ance
and
Ris
k C
orrid
or P
rote
ctio
n.C
ateg
ory
3a fo
r Med
icar
e Pa
rt D
Cov
erag
e w
ould
be
for a
ll cl
aim
s du
ring
a pe
riod
whe
n bo
th re
insu
ranc
e co
vera
ge a
nd ri
sk c
orrid
or p
rote
ctio
n ar
e pr
ovid
ed.
Line
(14)
– S
ub-T
otal
Pai
d C
laim
s.Th
e to
tal p
aid
clai
ms f
or M
edic
are
Part
D C
over
age,
exc
ludi
ng su
pple
men
tal b
enef
its.
Line
(16)
– W
eigh
ted
Ave
rage
Man
aged
Car
e D
isco
unt.
Thes
e am
ount
s ar
e ca
lcul
ated
by
divi
ding
the
tota
l wei
ghte
d cl
aim
s by
the
com
para
ble
sub-
tota
l cla
im p
aym
ents
. Fo
r Col
umn
(3),
this
is C
olum
n (3
), Li
ne (9
) div
ided
by
Col
umn
(2),
Line
(9).
For
Col
umn
(4),
this
is C
olum
n (4
) Lin
e (1
4) d
ivid
ed b
y C
olum
n (2
), Li
ne (1
4).
Line
(17)
– W
eigh
ted
Ave
rage
Man
aged
Car
e R
isk
Adj
ustm
ent F
acto
r. Th
ese
are
the
cred
it fa
ctor
s tha
t are
carr
ied
back
to th
e un
derw
ritin
g ris
k ca
lcul
atio
n. T
hey
are
one
min
us th
e W
eigh
ted
Ave
rage
Man
aged
Car
e D
isco
unt v
alue
sin
Line
(16)
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
31
10/2
0/20
17
Line
s (1
8) th
roug
h (2
4) a
re th
e ca
lcul
atio
n of
the
wei
ghte
d av
erag
e fa
ctor
for t
he C
ateg
ory
2 cl
aim
s pa
ymen
ts s
ubje
ct to
with
hold
s an
d bo
nuse
s. Th
is ta
ble
requ
ires
data
fr
om th
e PR
IOR
YEA
R to
com
pute
the
curr
ent y
ear’
s dis
coun
t fac
tor.
Thes
e do
not
app
ly to
Med
icar
e Pa
rt D
cov
erag
e.
Line
(18)
– W
ithho
ld &
Bon
us P
aym
ents
,prio
r yea
r.En
ter t
he p
rior y
ear’
s act
ual w
ithho
ld a
nd b
onus
pay
men
ts.
Line
(19)
–W
ithho
ld &
Bon
uses
Ava
ilabl
e,pr
ior y
ear.
Ente
r the
prio
r yea
r’s w
ithho
lds a
nd b
onus
es th
at w
ere
avai
labl
e fo
r pay
men
t in
the
prio
r yea
r.
Line
(20)
– M
CC
Mul
tiplie
r – A
vera
ge W
ithho
ld R
etur
ned.
Div
ides
Lin
e (1
8) b
y Li
ne (1
9) to
det
erm
ine
the
porti
on o
f with
hold
s an
d bo
nuse
s th
at w
ere
actu
ally
retu
rned
in
the
prio
r yea
r.
Line
(21)
– W
ithho
lds &
Bon
uses
Ava
ilabl
e, p
rior y
ear.
Equa
l to
Line
(19)
and
is a
utom
atic
ally
pul
led
forw
ard.
Line
(22)
– C
laim
s Pa
ymen
ts S
ubje
ct to
With
hold
, prio
r ye
ar. C
laim
pay
men
ts th
at w
ere
subj
ect t
o w
ithho
lds
and
bonu
ses
in th
e pr
ior y
ear.
Equa
l to
L(3)
+ L
(4) o
f the
m
anag
ed c
are
cred
it cl
aim
s pay
men
t tab
le F
OR
TH
E PR
IOR
YEA
R.
Line
(23)
– A
vera
ge W
ithho
ld R
ate,
prio
r yea
r.D
ivid
es L
ine
(21)
by
Line
(22)
to d
eter
min
e th
e av
erag
e w
ithho
ld ra
te fo
r the
prio
r yea
r.
Line
(24)
– M
CC
Dis
coun
t Fac
tor,
Cat
egor
y 2.
Mul
tiplie
s Lin
e (2
0) b
y Li
ne(2
3) to
det
erm
ine
the
disc
ount
fact
or fo
r Cat
egor
y 2
clai
ms p
aym
ents
in th
e cu
rren
t yea
r, ba
sed
on th
e pe
rfor
man
ce o
f the
hea
lth e
ntity
’s w
ithho
ld/b
onus
pro
gram
in th
e pr
ior y
ear.
CR
ED
IT R
ISK
X
R01
9
Rei
nsur
ance
Ced
ed –
L(1
) thr
ough
L(2
1)
Ther
e is
a c
redi
t ris
k as
soci
ated
with
rec
over
abili
ty o
f am
ount
s du
e fr
om r
eins
urer
s. H
owev
er,
rein
sura
nce
with
who
lly o
wne
d su
bsid
iarie
s is
exe
mpt
fro
m R
BC
re
quire
men
ts b
ecau
se a
ffili
ate
risk
is a
ddre
ssed
els
ewhe
re in
the
Hea
lth R
BC
form
ula.
The
RB
C re
quire
men
t is
0.5
perc
ent o
f the
ann
ual s
tate
men
t val
ue o
f rec
over
able
s, un
earn
ed p
rem
ium
s, an
d ot
her r
eser
ve c
redi
ts.
The
annu
al s
tate
men
t ref
eren
ces
for r
eins
uran
ce re
cove
rabl
es (p
aid
and
unpa
id) c
ome
from
Sch
edul
e S,
Par
t 2. T
he a
nnua
l sta
tem
ent r
efer
ence
s fo
r une
arne
d pr
emiu
ms
and
othe
r res
erve
cre
dits
are
in S
ched
ule
S, P
art 3
. The
ann
ual s
tate
men
t ref
eren
ce fo
r rei
nsur
ance
reco
vera
bles
rela
ted
to th
e fe
dera
l Aff
orda
ble
Car
e A
ct (A
CA
) sho
uld
be re
porte
d in
Lin
e (4
) and
Lin
e (1
0) a
nd e
xclu
ded
from
Lin
e (3
) and
Lin
e (9
).
Cap
itatio
ns –
L(2
2) th
roug
h L
(28)
C
redi
t ris
k ar
ises
from
cap
itatio
ns p
aid
dire
ctly
to p
rovi
ders
or t
o in
term
edia
ries.
The
risk
is th
at th
e he
alth
ent
ity w
ill p
ay th
e ca
pita
tion
but w
ill n
ot re
ceiv
e th
e ag
reed
-up
on s
ervi
ces,
and
will
enc
ount
er u
nexp
ecte
d ex
pens
es in
arr
angi
ng fo
r alte
rnat
ive
cove
rage
. The
cre
dit r
isk
RB
C re
quire
men
t for
cap
itatio
ns p
aid
dire
ctly
to p
rovi
ders
is
two
perc
ent o
f th
e am
ount
of
capi
tatio
ns r
epor
ted
as p
aid
clai
ms
in t
he M
anag
ed C
are
Cre
dit
Cal
cula
tion
page
. Thi
s am
ount
is r
ough
ly e
qual
to
two
wee
ks o
f pa
id
capi
tatio
ns.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
32
10/2
0/20
17
How
ever
, a h
ealth
ent
ity c
an a
lso
mak
e ar
rang
emen
ts w
ith it
s pr
ovid
ers
that
miti
gate
the
cred
it ris
k, s
uch
as o
btai
ning
acc
epta
ble
lette
rs o
f cre
dit o
r with
hold
ing
fund
s. W
here
the
heal
th e
ntity
obt
ains
thes
e pr
otec
tions
for
a s
peci
fic p
rovi
der,
the
amou
nt o
f ca
pita
tions
pai
d to
that
pro
vide
r ar
e ex
empt
ed f
rom
the
cred
it ris
k ch
arge
. A
sepa
rate
Cap
itatio
ns w
orks
heet
is p
rovi
ded
to c
alcu
late
this
exe
mpt
ion,
but
a h
ealth
ent
ity is
not
obl
igat
ed to
com
plet
e th
e w
orks
heet
.
The
cred
it ris
k R
BC
req
uire
men
t for
cap
itatio
ns to
inte
rmed
iarie
s is
4 p
erce
nt o
f th
e an
nual
sta
tem
ent a
mou
nt o
f th
e ca
pita
ted
paym
ents
rep
orte
d as
pai
d cl
aim
s in
the
Man
aged
Car
e C
redi
t Cal
cula
tion
page
. How
ever
, as
with
cap
itatio
ns p
aid
dire
ctly
to p
rovi
ders
, the
regu
late
d he
alth
ent
ity c
an e
limin
ate
som
e or
all
of th
e cr
edit
risk
that
ar
ises
from
cap
itatio
ns to
inte
rmed
iarie
s by
obt
aini
ng a
ccep
tabl
e le
tters
of c
redi
t or w
ithhe
ld fu
nds.
Ther
e is
no
cred
it ris
k fo
r any
por
tion
of th
e m
anag
ed c
are
disc
ount
fa
ctor
for M
edic
are
Part
D C
over
age.
Line
(22)
– T
otal
Cap
itatio
ns P
aid
Dire
ctly
to P
rovi
ders
.Thi
s is t
he a
mou
nt re
porte
d in
the
Man
aged
Car
e C
redi
t Cal
cula
tion
page
, Lin
e (5
).
Line
(23)
– L
ess
Secu
red
Cap
itatio
ns to
Pro
vide
rs.C
ompu
ted
from
the
Cap
itatio
ns w
orks
heet
, thi
s in
clud
es a
ll ca
pita
tions
to p
rovi
ders
that
are
sec
ured
by
fund
s w
ithhe
ld
or b
y ac
cept
able
lette
rs o
f cr
edit
equa
l to
8 pe
rcen
t of
annu
al c
laim
s pa
id to
the
prov
ider
. If
less
er p
rote
ctio
n is
pro
vide
d (e
.g.,
an a
ccep
tabl
e le
tter
of c
redi
t equ
al to
2
perc
ent o
f ann
ual c
laim
s pa
id to
that
pro
vide
r), t
hen
the
amou
nt o
f cap
itatio
n is
pro
rate
d. T
he e
xem
ptio
n is
cal
cula
ted
sepa
rate
ly fo
r eac
h pr
ovid
er a
nd in
term
edia
ry. A
sa
mpl
e w
orks
heet
to c
alcu
late
the
exem
ptio
n is
show
n fo
llow
ing
thes
e in
stru
ctio
ns.
Line
(24)
– C
apita
tions
to P
rovi
ders
Sub
ject
to C
redi
t Ris
k C
harg
e. L
ine
(22)
min
us L
ine
(23)
.
Line
(25
) –
Tota
l C
apita
tions
to
Inte
rmed
iarie
s.Fr
om L
ine
(6)
and
Line
(7)
of
the
Man
aged
Car
e C
redi
t C
alcu
latio
n pa
ge, t
his
incl
udes
all
capi
tatio
n pa
ymen
ts t
o in
term
edia
ries.
Line
(26
) –
Less
Sec
ured
Cap
itatio
ns to
Int
erm
edia
ries.
Com
pute
d fr
om th
e C
apita
tions
wor
kshe
et, t
his
incl
udes
all
capi
tatio
ns to
pro
vide
rs th
at a
re s
ecur
ed b
y fu
nds
with
held
or
by a
ccep
tabl
e le
tters
of
cred
it eq
ual t
o 16
per
cent
of
annu
al c
laim
s pa
id to
the
prov
ider
. If
less
er p
rote
ctio
n is
pro
vide
d (e
.g.,
an a
ccep
tabl
e le
tter
of c
redi
t eq
ual
to 5
per
cent
of
annu
al c
laim
s pa
id t
o th
at p
rovi
der)
, th
en t
he a
mou
nt o
f ca
pita
tion
is p
rora
ted.
The
exe
mpt
ion
is c
alcu
late
d se
para
tely
for
eac
h pr
ovid
er a
nd
inte
rmed
iary
. A sa
mpl
e w
orks
heet
to c
alcu
late
the
exem
ptio
n is
show
n be
low
thes
e in
stru
ctio
ns.
CA
PITA
TIO
NS
TO P
RO
VID
ERS
AN
D IN
TER
MED
IAR
IES
CR
EDIT
RIS
K E
XEM
PTIO
N W
OR
KSH
EET
CA
PITA
TIO
NS
PAID
DIR
ECTL
Y T
O P
RO
VID
ERS
A
B
C
D=(
B+C
)/A
E=A
*Min
(1,D
/8%
)
Num
ber
Nam
e of
Pro
vide
r Pa
id C
apita
tions
D
urin
g Y
ear
Lette
r of C
redi
t Am
ount
Fu
nds W
ithhe
ld
Prot
ectio
n Pe
rcen
tage
Ex
empt
Cap
itatio
ns
1 Sa
lly S
mith
12
5,00
0 5,
000
0 4%
62
,500
2
Jim
Jone
s 50
,000
5,
000
0 10
%
50,0
00
3 D
r. D
oolit
tle
750,
000
5,00
0 50
,000
7%
68
7,50
0 4
Dr.
Cle
men
ts
25,0
00
0 0
0%
05
All
othe
rs
2,50
0,00
0
019
999
Tota
l to
Prov
ider
s 3,
450,
000
xxx
xxx
xxx
800,
000
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
33
10/2
0/20
17
CA
PITA
TIO
NS
PAID
TO
UN
REG
ULA
TED
INTE
RM
EDIA
RIE
S
A
B
C
D=(
B+C
)/A
E=A
*Min
(1,D
/16%
)
Num
ber
Nam
e of
Pro
vide
r Pa
id C
apita
tions
D
urin
g Y
ear
Lette
r of C
redi
t Am
ount
Fu
nds W
ithhe
ld
Prot
ectio
n Pe
rcen
tage
Ex
empt
Cap
itatio
ns
1 M
ercy
Hos
pita
l 2,
500,
000
200,
000
300,
000
20%
2,
500,
000
2 C
hica
go H
ope
1,00
0,00
0 10
0,00
0 0
10%
62
5.00
0 3
Bill
's C
linic
4,
500,
000
0 50
0,00
0 11
%
3,12
5,00
0 4
Joe's
HM
O
3,50
0,00
0 0
0 0%
0
5 A
ll ot
hers
2,
500,
000
0
2999
9 To
tal t
o U
nreg
ulat
ed
Inte
rmed
14
,000
,000
xx
x xx
x xx
x 6,
250,
000
CA
PITA
TIO
NS
PAID
TO
REG
ULA
TED
INTE
RM
EDIA
RIE
S
Num
ber
Nam
e of
Pro
vide
r Pa
id C
apita
tions
D
urin
g Y
ear
Dom
icili
ary
Stat
e
Exem
pt C
apita
tions
1 Fr
ed's
HM
O
2,50
0,00
0 N
Y
2,50
0,00
0 2
Blu
e C
ross
of G
uam
50
,000
G
U
50,0
00
3999
9 To
tal t
o R
egul
ated
In
term
ed
2,55
0,00
0 xx
x xx
x xx
x 2,
550,
000
99
999
Tota
l 20
,000
,000
xx
x xx
x xx
x 9,
600,
000
Div
ide
the
“Pro
tect
ion
Perc
enta
ge”
by 8
per
cent
(pr
ovid
ers)
or
by 1
6 pe
rcen
t (un
regu
late
d in
term
edia
ries)
to o
btai
n th
e pe
rcen
tage
of
the
capi
tatio
n pa
ymen
ts th
at a
re
exem
pt. I
f the
pro
tect
ion
perc
enta
ge is
gre
ater
than
100
per
cent
, the
ent
ire c
apita
tion
paym
ent a
mou
nt is
exe
mpt
. All
capi
tatio
ns to
regu
late
d in
term
edia
ries q
ualif
y fo
r the
ex
empt
ion.
The
“Exe
mpt
Cap
itatio
n” a
mou
nt fr
om L
ine
1999
9 of
$80
0,00
0 w
ould
be
repo
rted
on L
(23)
Les
s Se
cure
d C
apita
tions
to P
rovi
ders
in th
e C
redi
t Ris
k pa
ge. T
he to
tal o
f th
e “E
xem
pt C
apita
tion”
am
ount
fro
m L
ine
2999
9 pl
us L
ine
3999
9 ($
6,25
0,00
0+$2
,550
,000
=$8,
800,
000)
wou
ld b
e re
porte
d on
L(2
6) L
ess
Secu
red
Cap
itatio
ns t
o In
term
edia
ries
in th
e C
redi
t Ris
k pa
ge.
Line
(27)
– C
apita
tions
to In
term
edia
ries S
ubje
ct to
Cre
dit R
isk
Cha
rge.
L(25
) min
us L
(26)
.
Line
(28)
– C
apita
tion
Cre
dit R
isk
RB
C. S
um o
f L(2
4) a
nd L
(27)
.
Oth
er R
ecei
vabl
es –
L(2
9) th
roug
h L
(35)
Th
ere
is a
n R
BC
requ
irem
ent o
f 1 p
erce
nt o
f the
ann
ual s
tate
men
t am
ount
of i
nves
tmen
t inc
ome
rece
ivab
le a
nd a
n R
BC
requ
irem
ent o
f 5 p
erce
nt o
f the
ann
ual s
tate
men
t am
ount
for
pha
rmac
eutic
al r
ebat
es a
nd a
mou
nts
due
from
par
ents
, su
bsid
iarie
s, an
d af
filia
tes,
and
aggr
egat
e w
rite-
ins
for
othe
r th
an i
nves
ted
asse
ts a
nd a
n R
BC
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
34
10/2
0/20
17
requ
irem
ent o
f 19
perc
ent o
f the
ann
ual s
tate
men
t am
ount
for a
ll ot
her h
ealth
car
e re
ceiv
able
s rep
orte
d in
Lin
es (3
0.2)
thro
ugh
(30.
6). E
nter
the
appr
opria
te v
alue
in L
ines
(2
9) th
roug
h (3
5).
Line
(30.
1). P
harm
aceu
tical
reba
tes
are
arra
ngem
ents
bet
wee
n ph
arm
aceu
tical
com
pani
es a
nd re
porti
ng e
ntiti
es in
whi
ch th
e re
porti
ng e
ntiti
es re
ceiv
e re
bate
s ba
sed
upon
th
e dr
ug u
tiliz
atio
n of
its
subs
crib
ers
at p
artic
ipat
ing
phar
mac
ies.
Thes
e re
bate
s ar
e so
met
imes
reco
rded
as
rece
ivab
les
by re
porti
ng e
ntiti
es u
sing
est
imat
es b
ased
upo
n hi
stor
ical
tre
nds
whi
ch s
houl
d be
adj
uste
d to
ref
lect
sig
nific
ant
varia
bles
inv
olve
d in
the
cal
cula
tion,
suc
h as
num
ber
of p
resc
riptio
ns w
ritte
n/fil
led,
typ
e of
dru
gs
pres
crib
ed, u
se o
f ge
neric
vs.
bran
d-na
me
drug
s, et
c. I
n ot
her
case
s, th
e re
porti
ng e
ntity
det
erm
ines
the
amou
nt o
f th
e re
bate
due
bas
ed o
n th
e ac
tual
use
of
vario
us
pres
crip
tion
drug
s du
ring
the
accu
mul
atio
n pe
riod
and
then
bill
s th
e ph
arm
aceu
tical
com
pany
. Ofte
ntim
es, a
pha
rmac
y be
nefit
s m
anag
emen
t com
pany
may
det
erm
ine
the
amou
nt o
f th
e re
bate
bas
ed o
n a
listin
g (o
f pr
escr
iptio
n dr
ugs
fille
d) p
repa
red
for
the
repo
rting
ent
ity’s
rev
iew
. The
rep
ortin
g en
tity
will
con
firm
the
lis
ting
and
the
phar
mac
eutic
al re
bate
rece
ivab
le. P
harm
aceu
tical
reba
tes m
ay re
late
to in
sure
d pl
ans o
r uni
nsur
ed p
lans
. Onl
y th
e re
ceiv
able
am
ount
rela
ted
to th
e in
sure
d pl
ans s
houl
d be
re
porte
d on
this
line
. Am
ount
com
es fr
om a
nnua
l sta
tem
ent E
xhib
it 3,
Col
umn
7, L
ine
0199
999.
Line
(30.
2). C
laim
ove
rpay
men
ts m
ay o
ccur
as
a re
sult
of se
vera
l eve
nts,
incl
udin
g bu
t not
lim
ited
to c
laim
pay
men
ts m
ade
in e
rror t
o a
prov
ider
. Rep
ortin
g en
titie
s of
ten
esta
blis
h re
ceiv
able
s for
cla
im o
verp
aym
ents
. Am
ount
com
es fr
om a
nnua
l sta
tem
ent E
xhib
it 3,
Col
umn
7, L
ine
0299
999.
Line
(30.
3). A
hea
lth e
ntity
may
mak
e lo
ans
or a
dvan
ces
to la
rge
hosp
itals
or o
ther
pro
vide
rs. S
uch
loan
s or
adv
ance
s ar
e su
ppor
ted
by le
gally
enf
orce
able
con
tract
s an
d ar
e ge
nera
lly e
nter
ed in
to a
t the
req
uest
of
the
prov
ider
. In
man
y ca
ses,
loan
s or
adv
ance
s ar
e pa
id m
onth
ly a
nd a
re in
tend
ed to
rep
rese
nt o
ne m
onth
of
fee-
for-
serv
ice
clai
ms a
ctiv
ity w
ith th
e re
spec
tive
prov
ider
. Am
ount
com
es fr
om a
nnua
l sta
tem
ent E
xhib
it 3,
Col
umn
7, L
ine
0399
999.
Line
(30.
4). A
cap
itatio
n ar
rang
emen
t is a
com
pens
atio
n pl
an u
sed
in c
onne
ctio
n w
ith so
me
man
aged
car
e co
ntra
cts i
n w
hich
a p
hysi
cian
or o
ther
med
ical
pro
vide
r is p
aid
a fla
t am
ount
, usu
ally
on
a m
onth
ly b
asis
, for
eac
h su
bscr
iber
who
has
ele
cted
to u
se th
at p
hysi
cian
or
med
ical
pro
vide
r. In
som
e in
stan
ces,
adva
nces
are
mad
e to
a
prov
ider
und
er a
cap
itatio
n ar
rang
emen
t in
antic
ipat
ion
of fu
ture
serv
ices
. Am
ount
com
es fr
om a
nnua
l sta
tem
ent E
xhib
it 3,
Col
umn
7, L
ine
0499
999.
Line
(30
.5).
Ris
k sh
arin
g ag
reem
ents
are
con
tract
s be
twee
n re
porti
ng e
ntiti
es a
nd p
rovi
ders
with
a r
isk
shar
ing
elem
ent
base
d up
on u
tiliz
atio
n. T
he c
ompe
nsat
ion
paym
ents
for r
isk
shar
ing
agre
emen
ts a
re ty
pica
lly e
stim
ated
mon
thly
and
set
tled
annu
ally
. The
se a
gree
men
ts c
an re
sult
in re
ceiv
able
s du
e fr
om th
e pr
ovid
ers
if an
nual
ut
iliza
tion
is d
iffer
ent t
han
that
use
d in
est
imat
ing
the
mon
thly
com
pens
atio
n. A
mou
nt c
omes
from
ann
ual s
tate
men
t Exh
ibit
3, C
olum
n 7,
Lin
e 05
9999
9.
Line
(30.
6). A
ny o
ther
hea
lth c
are
rece
ivab
le n
ot re
porte
d in
Lin
es (3
0.1)
thro
ugh
(30.
5). A
mou
nt c
omes
from
ann
ual s
tate
men
t Exh
ibit
3, C
olum
n 7,
Lin
e 06
9999
9.
Line
(31)
. Onl
y in
clud
e on
this
line
am
ount
s re
ceiv
able
rela
ted
to p
harm
aceu
tical
reba
tes
on u
nins
ured
pla
ns th
at a
re in
exc
ess
of th
e lia
bilit
y es
timat
ed b
y th
e re
porti
ng
entit
y fo
r the
por
tion
of su
ch re
bate
s due
to th
e un
insu
red
acci
dent
and
hea
lth p
lans
.
BU
SIN
ESS
RIS
KX
R02
1
Ther
e ar
e fo
ur m
ajor
sub
cate
gorie
s fo
und
in t
he B
usin
ess
Ris
k se
ctio
n of
the
for
mul
a: A
dmin
istra
tive
Expe
nse
Ris
k; N
on-U
nder
writ
ten
and
Lim
ited
Ris
k B
usin
ess;
G
uara
nty
Fund
Ass
essm
ent R
isk;
and
Exc
essi
ve G
row
th R
isk.
Adm
inis
trat
ive
Exp
ense
Ris
k –
L(1
) thr
ough
L(7
) and
L(2
0) th
roug
h L
(26)
Th
ere
is a
risk
ass
ocia
ted
with
the
fluct
uatio
n of
adm
inis
trativ
e ex
pens
es re
lativ
e to
the
prem
ium
nee
ded
to p
ay th
ose
expe
nses
. Est
imat
es o
f adm
inis
trativ
e ex
pens
e ra
tios
are
built
into
the
pric
e of
pro
vidi
ng m
edic
al c
are
to su
bscr
iber
s, ju
st a
s cla
ims e
xpen
ses a
re b
uilt
into
the
rate
s. Li
ke c
laim
exp
ense
s, ad
min
istra
tive
expe
nses
are
subj
ect t
o m
ises
timat
ion,
and
ther
efor
e, g
ener
ate
an R
BC
requ
irem
ent,
but l
ower
than
the
RB
C re
quire
men
t for
cla
im fl
uctu
atio
ns.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
35
10/2
0/20
17
Adm
inis
trativ
e Ex
pens
e R
isk
enco
mpa
sses
bot
h C
laim
s Adj
ustm
ent E
xpen
ses a
nd G
ener
al A
dmin
istra
tive
Expe
nses
as s
epar
ate
item
s tha
t sho
uld
be re
porte
d on
Lin
es (1
) an
d (2
), re
spec
tivel
y.
The
ASC
and
ASO
reve
nues
and
exp
ense
s tha
t are
incl
uded
in th
e A
dmin
istra
tive
Expe
nses
repo
rted
in L
ines
(1) a
nd (2
) sho
uld
be re
mov
ed fr
om th
ose
lines
by
repo
rting
th
e ne
t am
ount
of e
xpen
ses
to th
e re
venu
es o
n Li
nes
(3) a
nd (4
). If
the
reve
nues
are
gre
ater
than
the
expe
nses
for t
he A
SC o
r ASO
bus
ines
s, th
en a
neg
ativ
e am
ount
will
be
repo
rted
on th
ese
lines
in o
rder
to a
dd b
ack
the
net i
ncom
e fr
om th
e A
SC o
r ASO
bus
ines
s. K
eep
in m
ind
that
onl
y th
e A
SC a
nd A
SO re
venu
es a
nd e
xpen
ses
that
are
in
clud
ed in
the
adm
inis
trativ
e ex
pens
es w
ill b
e re
porte
d on
line
s (3)
and
(4).
ASC
/ASO
com
mis
sion
s tha
t are
repo
rted
with
in th
e U
nder
writ
ing
and
Inve
stm
ent E
xhib
it, P
art 3
of t
he a
nnua
l sta
tem
ent s
houl
d be
incl
uded
in L
ine
(5).
Line
s (2
0) th
roug
h (2
6) c
alcu
late
the
RB
C ri
sk fa
ctor
for a
dmin
istra
tive
expe
nse
risk
as a
wei
ghte
d av
erag
e, u
sing
und
erw
ritin
g ris
k re
venu
e as
the
wei
ght.
The
fact
or is
7
perc
ent o
f the
firs
t $25
mill
ion
of u
nder
writ
ing
risk
reve
nue
plus
4 p
erce
nt o
f the
und
erw
ritin
g ris
k re
venu
es in
exc
ess
of $
25 m
illio
n, d
ivid
ed b
y to
tal u
nder
writ
ing
risk
reve
nues
. The
wei
ghte
d av
erag
e fa
ctor
is th
en m
ultip
lied
by th
e ad
min
istra
tive
expe
nses
exc
ludi
ng a
dmin
istra
tive
expe
nses
ass
ocia
ted
with
ASC
/ASO
bus
ines
s, pr
emiu
m
taxe
s and
com
mis
sion
pay
men
ts. T
he e
ndin
g ch
arge
is th
en p
rora
ted
for a
dmin
istra
tive
expe
nses
rela
ted
only
to th
e m
anag
ed c
are
lines
of b
usin
ess.
Non
-Und
erw
ritt
en a
nd L
imite
d R
isk
– L
(8) t
hrou
gh L
(11)
Th
e ris
ks a
ssoc
iate
d w
ith a
dmin
istra
tive
serv
ices
onl
y (A
SO)
arra
ngem
ents
and
adm
inis
trativ
e se
rvic
es c
ontra
cts
(ASC
) ar
e di
ffer
ent
than
the
ris
ks o
f un
derw
ritte
n bu
sine
ss. T
here
fore
, the
adm
inis
trativ
e ex
pens
es fo
r the
se c
ontra
cts
are
nette
d ou
t of t
he to
tal a
dmin
istra
tive
risk
cate
gory
bef
ore
appl
ying
a ri
sk fa
ctor
. How
ever
, the
re is
st
ill s
ome
risk
that
the
adm
inis
trativ
e ex
pens
es fo
r the
se c
ontra
cts
are
insu
ffic
ient
to a
bsor
b th
e fu
ll ou
tlay
requ
ired
and
for t
he re
cove
ry o
f ASC
cla
ims
paym
ents
. Whi
le
the
risk
asso
ciat
ed w
ith th
ese
expe
nses
is lo
wer
than
that
of g
ener
al o
pera
ting
expe
nse
risk,
it is
still
gre
ater
than
zer
o.
ASO
adm
inis
trativ
e fe
es,
and
reim
burs
emen
ts u
nder
ASC
con
tract
s fo
r bo
th a
dmin
istra
tive
fees
and
the
med
ical
cos
ts p
aid
(ASC
onl
y),
are
incl
uded
in
the
Non
-U
nder
writ
ten
and
Lim
ited
Ris
k B
ase.
NO
TE
: The
cla
im p
aym
ents
und
er A
SC c
ontra
cts
SHO
ULD
NO
T be
incl
uded
in th
e U
nder
writ
ing
Risk
sec
tion;
they
are
repo
rted
in th
e N
on-U
nder
writ
ten
and
Lim
ited
Ris
k se
ctio
n on
ly.
The
RB
C r
equi
rem
ent
for
adm
inis
trativ
e ex
pens
es o
n no
n-un
derw
ritte
n an
d lim
ited
risk
busi
ness
is
two
perc
ent
of b
oth
ASC
adm
inis
trativ
e ex
pens
e an
d A
SO
adm
inis
trativ
e ex
pens
es. T
he R
BC
req
uire
men
t fo
r cl
aim
s pa
ymen
ts p
aid
thou
gh A
SC a
rran
gem
ents
is
one
perc
ent
of t
he m
edic
al e
xpen
se p
aym
ents
[no
t in
clud
ing
Med
icar
e Pa
rt D
rein
sura
nce
paym
ent o
r low
-inco
me
subs
idy
(cos
t sha
ring
porti
on].
The
RB
C re
quire
men
t for
fee-
for s
ervi
ce re
venu
es re
ceiv
ed fr
om o
ther
repo
rting
ent
ities
is a
lso
1 pe
rcen
t.
Gua
rant
y Fu
nd A
sses
smen
t Ris
k –
L(1
2)
If th
e re
porti
ng e
ntity
is su
bjec
t to
guar
anty
fund
ass
essm
ents
in a
ny st
ate,
ther
e is
an
RB
C re
quire
men
t of 0
.5 p
erce
nt o
f the
dire
ct e
arne
d pr
emiu
ms s
ubje
ct to
ass
essm
ent
in th
at st
ate.
Pre
miu
ms s
ubje
ct to
gua
rant
y fu
nd a
sses
smen
ts th
at a
re re
porte
d in
Sch
edul
e T
shou
ld b
e ag
greg
ated
and
repo
rted
in L
ine
(12)
.
Exc
essi
ve G
row
th R
isk
– L
(13)
thro
ugh
L(1
9)
Exce
ssiv
e gr
owth
risk
is a
n im
porta
nt e
lem
ent o
f the
Hea
lth R
BC
form
ula.
Sev
eral
reco
mm
enda
tions
for r
ecog
nizi
ng g
row
th ri
sk w
ere
cons
ider
ed, i
nclu
ding
gro
wth
in
unde
rwrit
ing
risk
RB
C b
y lin
e of
bus
ines
s, gr
owth
in p
rem
ium
, and
gro
wth
in e
nrol
lmen
t. H
owev
er, t
hese
var
ious
mea
sure
men
ts d
id n
ot d
iscr
imin
ate
betw
een
repo
rting
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
36
10/2
0/20
17
entit
ies
that
had
con
trolle
d gr
owth
with
no
acco
mpa
nyin
g in
crea
se in
und
erw
ritin
g ris
k an
d th
ose
that
wer
e gr
owin
g in
bot
h vo
lum
e an
d ris
k. A
dditi
onal
ly, t
he w
orki
ng
grou
p w
ante
d to
avo
id im
posi
ng a
gro
wth
cha
rge
that
wou
ld u
nfai
rly d
iscr
imin
ate
agai
nst s
tart-
up c
ompa
nies
whe
re h
igh
grow
th ra
tes
wer
e th
e no
rm. S
tart
-up
heal
th
com
pani
es m
ay c
onsi
der
use
of t
heir
fir
st y
ear
proj
ecte
d am
ount
s (in
clud
ed in
the
pro
ject
ed R
BC
with
in t
he a
ppro
ved
prof
orm
a) u
pon
appr
oval
fro
m t
heir
do
mic
iliar
y st
ate.
The
risk
char
ge fo
r exc
essi
ve g
row
th is
set
as
a fu
nctio
n of
bot
h gr
owth
in u
nder
writ
ing
risk
reve
nue
and
in u
nder
writ
ing
risk
RB
C. A
“sa
fe h
arbo
r” le
vel o
f gro
wth
is
esta
blis
hed
as th
e gr
owth
rat
e in
pre
miu
ms
plus
10
perc
ent.
Ther
efor
e, if
the
repo
rting
ent
ity h
ad a
n in
crea
se in
und
erw
ritin
g ris
k re
venu
e vo
lum
e of
30
perc
ent,
its
unde
rwrit
ing
risk
RB
C c
ould
gro
w u
p to
40
perc
ent b
efor
e an
y ad
ditio
nal g
row
th ri
sk R
BC
is g
ener
ated
. Tha
t way
, an
entit
y th
at d
oubl
es it
s vo
lum
e w
ithou
t mor
e th
an
doub
ling
its R
BC
will
not
be
subj
ect t
o th
e ex
cess
ive
grow
th R
BC
cha
rge.
How
ever
, an
entit
y th
at d
oubl
es it
s RB
C w
ithou
t dou
blin
g its
und
erw
ritin
g ris
k re
venu
e vo
lum
e ca
n be
exp
ecte
d to
trig
ger t
he e
xces
sive
gro
wth
cha
rge.
To c
alcu
late
exc
essi
ve g
row
th r
isk
RB
C in
fut
ure
year
s, en
ter
the
prio
r ye
ar’s
und
erw
ritin
g ris
k re
venu
e [P
rior
Yea
r U
nder
writ
ing
Ris
k –
Expe
rienc
e Fl
uctu
atio
n R
isk
page
, Col
umn
(7),
Line
(5)]
in L
ine
(13)
. The
prio
r yea
r’s N
et U
nder
writ
ing
Ris
k R
BC
[Prio
r Yea
r Und
erw
ritin
g R
isk
– Ex
perie
nce
Fluc
tuat
ion
Risk
pag
e, C
(7),
L(18
)] is
en
tere
d on
Lin
e (1
5).
For
star
t-up
com
pani
es r
epor
t th
e fir
st t
wel
ve m
onth
s pr
ojec
ted
Und
erw
ritin
g R
isk
Rev
enue
on
Lin
e (1
3) a
nd t
he p
roje
cted
Net
U
nder
wri
ting
Ris
k R
BC o
n L
ine
(15)
. The
cur
rent
yea
r va
lues
are
pul
led
auto
mat
ical
ly in
to L
ines
(14)
and
(16)
. The
gro
wth
rate
in u
nder
writ
ing
risk
reve
nue
plus
10
per
cent
is m
ultip
lied
times
the
prio
r yea
r’s N
et U
nder
writ
ing
Ris
k R
BC
in L
ine
(15)
to e
stab
lish
the
safe
har
bor l
evel
for t
he c
urre
nt y
ear.
If th
ere
has
been
a m
erge
r or
div
estit
ure
durin
g th
e pe
riod,
the
valu
es m
ust b
e re
stat
ed to
ref
lect
eith
er th
e co
mbi
natio
n or
div
isio
n as
if it
had
bee
n in
pla
ce a
t the
be
ginn
ing
of th
e pe
riod.
For
exa
mpl
e, if
a m
erge
r tak
es p
lace
dur
ing
2017
, the
end
-of-
year
201
6 un
derw
ritin
g ris
k re
venu
e an
d th
e en
d-of
-yea
r 201
6 ne
t und
erw
ritin
g ris
k R
BC
mus
t bot
h be
adj
uste
d to
incl
ude
the
mer
ged
entit
y as
if it
had
bee
n ow
ned
in th
e pr
ior y
ear.
As
long
as
the
curr
ent y
ear’
s N
et U
nder
writ
ing
Ris
k R
BC
in L
ine
(16)
is lo
wer
than
the
safe
har
bor a
mou
nt in
Lin
e(1
7), t
here
is n
o ex
cess
ive
grow
th ri
sk c
harg
e. If
the
curr
ent y
ear’
s N
et U
nder
writ
ing
Ris
k R
BC
is g
reat
er th
an th
e sa
fe h
arbo
r am
ount
, the
n th
e ex
cess
ove
r the
saf
e ha
rbor
val
ue a
ppea
rs in
Lin
e (1
8). T
he e
xces
sive
gro
wth
ris
k ch
arge
in L
ine
(19)
is o
ne h
alf o
f the
val
ue in
Lin
e (1
8).
GR
OW
TH
OPE
RA
TIO
NA
L R
ISK
INFO
RM
AT
ION
AL
SE
CT
ION
INST
RU
CT
ION
S
(FO
R IN
FOR
MA
TIO
NA
L P
UR
POSE
S O
NL
Y)
XR
022
A g
row
th o
pera
tiona
l ris
k co
mpo
nent
will
be
asse
ssed
bas
ed o
n th
e in
crea
se in
gro
ss p
rem
ium
s writ
ten
(dire
ct +
ass
umed
) fro
m th
e pr
ior y
ear t
o th
e cu
rren
t yea
r an
d w
ill a
pply
a ri
sk fa
ctor
to g
ross
pre
miu
ms t
hat i
s in
exce
ss o
f 125
per
cent
of p
rior y
ear g
ross
pre
miu
ms.
The
gros
s pre
miu
ms w
ritte
n w
ill p
ull f
rom
the
U &
I Pa
rt 1,
Col
umn
1, L
ine
12. N
egat
ive
resu
lts w
ill b
e re
porte
d as
a z
ero
valu
e. N
OTE
: Dat
a w
ill b
e co
llect
ed to
iden
tify
prem
ium
s as
sum
ed fr
om s
ubsi
diar
ies
and
othe
r aff
iliat
es su
bjec
t to
RB
C re
quire
men
ts b
y th
e re
porti
ng e
ntity
to a
void
dup
licat
ion
of R
BC
requ
irem
ents
cap
ture
d in
the
H0
com
pone
nt.
The
thre
shol
d fo
r hea
lth g
row
th ri
sk is
hig
her t
han
the
thre
shol
d fo
r life
and
pro
perty
and
cas
ualty
gro
wth
risk
due
to th
e ex
pect
atio
n th
at m
edic
al in
flatio
n w
ill
have
a g
reat
er im
pact
on
heal
th p
rem
ium
s tha
n ge
nera
l inf
latio
n ha
s on
life
or p
rope
rty a
nd c
asua
lty p
rem
ium
s.
Dur
ing
test
ing,
spe
cific
con
side
ratio
n w
ill b
e gi
ven,
and
com
paris
ons
mad
e, to
the
met
hodo
logy
beh
ind
the
grow
th ri
sk c
harg
e un
der H
4 on
Lin
es (1
3) th
roug
h (1
9) o
n pa
ge X
R02
1 –
Bus
ines
s Ris
k of
the
Hea
lth R
BC
form
ula
and
any
oper
atio
nal r
isk
that
is c
urre
ntly
incl
uded
ther
ein.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
37
10/2
0/20
17
The
line
refe
renc
es i
n th
e In
form
atio
nal
Gro
wth
Ris
k Se
ctio
n ar
e ge
nera
lly s
elf-
expl
anat
ory.
Whe
re t
he f
orm
ula
lines
inc
lude
an
annu
al s
tate
men
t re
fere
nce,
the
in
stru
ctio
ns fo
r tha
t lin
e ar
e co
nsis
tent
with
thos
e in
the
annu
al st
atem
ent f
or th
e re
fere
nced
line
unl
ess o
ther
wis
e no
ted.
FED
ER
AL
AC
A R
ISK
AD
JUST
ME
NT
AN
D R
ISK
CO
RR
IDO
R S
EN
SIT
IVIT
Y T
EST
X
R02
3
The
fede
ral
AC
A R
isk
Adj
ustm
ent
and
Ris
k C
orrid
or S
ensi
tivity
Tes
t is
use
d to
adj
ust
TAC
for
the
ris
k ad
just
men
t re
ceiv
able
or
paya
ble
and
the
risk
corr
idor
re
trosp
ectiv
e pr
emiu
m a
nd re
serv
e fo
r rat
e cr
edit
or p
olic
y ex
perie
nce
ratin
g re
fund
s. Th
e se
nsiti
vity
test
iden
tifie
s th
e po
tent
ial i
mpa
ct to
an
insu
rer’
s R
BC
ratio
due
to
the
risk
of m
ises
timat
ing
the
AC
A ri
sk a
djus
tmen
t and
risk
cor
ridor
by
the
insu
rer.
The
sens
itivi
ty te
st lo
oks
at b
oth
the
risk
of o
vere
stim
atio
n an
d un
dere
stim
atio
n by
the
insu
rer f
or b
oth
rece
ivab
les
and
paya
bles
. Lin
es (1
) thr
ough
(11)
look
at t
he ri
sk o
f ove
rest
imat
ion
whi
le L
ines
(12)
thro
ugh
(22)
look
at t
he ri
sk o
f und
eres
timat
ion
by
decr
easi
ng a
nd in
crea
sing
the
amou
nt re
porte
d in
the
Not
es to
Fin
anci
al S
tate
men
t by
25 p
erce
nt. T
he s
ensi
tivity
test
pro
vide
s a
“wha
t if”
sce
nario
that
has
no
effe
ct o
n th
e ris
k-ba
sed
capi
tal a
mou
nts
repo
rted
in th
e an
nual
sta
tem
ent.
The
Hea
lth R
isk-
Bas
ed C
apita
l (E)
Wor
king
Gro
up d
eter
min
ed th
at a
25
perc
ent c
hang
e in
the
annu
al
stat
emen
t am
ount
and
a 5
0 pe
rcen
t fac
tor
shou
ld b
e us
ed to
cal
cula
te th
e ef
fect
of
the
mis
estim
atin
g th
e ris
k ad
just
men
t or
risk
corr
idor
rece
ivab
le a
nd p
ayab
le o
n th
e R
BC
ratio
. The
com
pany
can
pro
vide
an
expl
anat
ion
in th
e fo
otno
te if
the
com
pany
bel
ieve
s th
e fa
ctor
s ar
e no
t app
ropr
iate
, with
an
expl
anat
ion
as to
why
the
fact
ors
are
inap
prop
riate
.
Line
(1)
and
Lin
e (1
2) –
Pre
miu
m A
djus
tmen
ts R
ecei
vabl
e D
ue t
o A
CA
Ris
k A
djus
tmen
t. Th
is i
s th
e am
ount
rep
orte
d in
the
ann
ual
stat
emen
t N
otes
to
Fina
ncia
l St
atem
ent 2
4E2a
1. C
olum
n (2
) wou
ld e
qual
Col
umn
(1) m
ultip
lied
by th
e se
nsiti
vity
am
ount
.
Line
(2) a
nd L
ine
(13)
– P
rem
ium
Adj
ustm
ents
Pay
able
Due
to A
CA
Risk
Adj
ustm
ent.
This
is th
e am
ount
repo
rted
in th
e an
nual
sta
tem
ent N
otes
to F
inan
cial
Sta
tem
ent
24E2
a3. C
olum
n (2
) wou
ld e
qual
Col
umn
(1) m
ultip
lied
by th
e se
nsiti
vity
am
ount
.
Line
(3) a
nd L
ine
(14)
– T
otal
AC
A R
isk
Adj
ustm
ents
Rec
eiva
ble
and
Paya
ble.
Lin
e (3
) wou
ld b
e eq
ual t
o Li
ne (2
) min
us L
ine
(1) a
nd L
ine
(14)
wou
ld b
e eq
ual t
o Li
ne
(13)
min
us L
ine
(12)
.
Line
(4) a
nd L
ine
(15)
– A
ccru
ed R
etro
spec
tive
Prem
ium
Due
to A
CA
Ris
k C
orrid
ors.
This
is th
e am
ount
repo
rted
in th
e an
nual
sta
tem
ent N
otes
to F
inan
cial
Sta
tem
ent
24E2
c1.
Col
umn
(2) w
ould
equ
al C
olum
n (1
) mul
tiplie
d by
the
sens
itivi
ty a
mou
nt).
Line
(5) a
nd L
ine
(16)
– R
eser
ve fo
r Rat
e C
redi
ts o
r Pol
icy
Expe
rienc
e R
atin
g R
efun
ds D
ue to
AC
A R
isk
Cor
ridor
s. Th
is is
the
amou
nt re
porte
d in
the
annu
al s
tate
men
t N
otes
to F
inan
cial
Sta
tem
ent 2
4E2c
2. C
olum
n (2
) wou
ld e
qual
Col
umn
(1) m
ultip
lied
by th
e se
nsiti
vity
am
ount
.
Line
(6) a
nd L
ine
(17)
– T
otal
AC
A R
isk
Cor
ridor
Ret
rosp
ectiv
e Pr
emiu
m a
nd R
ate
Cre
dits
or P
olic
y Ex
perie
nce
Rat
ing
Ref
unds
. Lin
e (6
) is e
qual
to L
ine
(5) m
inus
Lin
e (4
) and
Lin
e (1
7) is
equ
al to
Lin
e (1
6) m
inus
Lin
e (1
5).
Line
(7) a
nd L
ine
(18)
– T
otal
Ris
k A
djus
tmen
t and
Ris
k C
orrid
or. T
he a
bsol
ute
valu
e of
Lin
e (7
), C
olum
n (3
) is
equa
l to
Line
(3) p
lus
Line
(6).
The
abso
lute
val
ue o
f Li
ne (1
8), C
olum
n (3
) is e
qual
to L
ine
(14)
plu
s Lin
e (1
7).
Line
(8) a
nd L
ine
(19)
– P
age
XR
026,
Tot
al A
djus
ted
Cap
ital,
Post
Def
erre
d Ta
x. L
ine
(6)
Line
(9) a
nd L
ine
(20)
– T
otal
Adj
uste
d C
apita
l Stre
ssed
for R
isk
Adj
ustm
ents
. Lin
e (9
) is e
qual
to L
ine
(8) m
inus
Lin
e (7
) and
Lin
e (2
0) is
equ
al to
Lin
e (1
9) m
inus
Lin
e (1
8).
Line
(10)
and
Lin
e (2
1) –
Aut
horiz
ed C
ontro
l Lev
el R
BC
. Pag
e X
R02
7 –
Com
paris
on o
f Tot
al A
djus
ted
Cap
ital t
o R
isk-
Bas
ed C
apita
l Lin
e (4
)
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
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nce
Com
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ers
38
10/2
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17
Line
(11)
and
Lin
e (2
2) –
AC
A R
isk
Adj
uste
d A
CL
RB
C R
atio
. Lin
e (1
1) is
equ
al to
Lin
e (9
) div
ided
by
Line
(10)
and
Lin
e (2
2) is
equ
al to
Lin
e (2
0) d
ivid
ed b
y Li
ne
(21)
.
Foot
note
- If
it is
the
belie
f of t
he c
ompa
ny th
at th
e fa
ctor
s are
not
app
ropr
iate
, pro
vide
an
expl
anat
ion
as to
why
the
fact
ors a
re in
appr
opria
te. P
rovi
de a
n ex
plan
atio
n as
w
hy th
e co
mpa
ny b
elie
ves t
hat t
he fa
ctor
s are
inap
prop
riate
.
CO
VA
RIA
NC
E C
AL
CU
LA
TIO
N
XR
024–
XR
025
The
purp
ose
of th
e H
ealth
RB
C fo
rmul
a is
to e
stim
ate
the
min
imum
risk
-bas
ed c
apita
l req
uire
d to
abs
orb
loss
es th
at c
an b
e ca
used
by
a se
ries
of c
atas
troph
ic fi
nanc
ial
even
ts. H
owev
er, i
t is
extre
mel
y un
likel
y th
at a
ll su
ch lo
sses
will
occ
ur s
imul
tane
ousl
y. T
he c
ovar
ianc
e fo
rmul
a ad
just
s th
e co
mbi
ned
effe
ct o
f the
H0,
H1,
H2,
H3,
and
H
4 ris
ks s
o th
at th
e co
mbi
natio
n of
risk
s is
less
than
the
sum
of t
he p
arts
. Sta
tistic
ally
, thi
s as
sum
es th
at th
e H
1, H
2, H
3 an
d H
4 ris
ks a
re u
ncor
rela
ted.
The
H0
risk
of
subs
idia
ries
is a
dded
to
the
tota
l un
der
the
assu
mpt
ion
that
the
ris
k of
the
sub
sidi
arie
s is
hig
hly
corr
elat
ed w
ith t
he r
isk
of t
he p
aren
t, so
tha
t if
the
pare
nt w
ere
to
expe
rienc
e se
vere
fina
ncia
l dis
tress
, the
subs
idia
ries w
ould
als
o be
adv
erse
ly a
ffec
ted.
The
com
pone
nts o
f the
RB
C a
fter C
ovar
ianc
e Fo
rmul
a ar
e:
H0
– A
sset
Ris
k –
Aff
iliat
es w
ith R
BC
H
1 –
Ass
et R
isk
– O
ther
H
2 –
Und
erw
ritin
g R
isk
H3
– C
redi
t Ris
k H
4 –
Bus
ines
s Ris
k
The
cova
rianc
e fo
rmul
a is
app
lied
befo
re a
ddin
g op
erat
iona
l ris
k on
Lin
e (3
7) o
n X
R02
5:
RB
C a
fter C
ovar
ianc
e B
efor
e O
pera
tiona
l Ris
k =
Squa
re R
oot o
f (H
1+
H2
+ H
3+
H4
)+ H
0
Ope
ratio
nal R
isk:
O
pera
tiona
l risk
is d
efin
ed a
s the
ris
k of
fina
ncia
l los
s res
ultin
g fr
om o
pera
tiona
l eve
nts,
such
as t
he in
adeq
uacy
or
failu
re o
f int
erna
l sys
tem
s, pe
rson
nel,
proc
edur
es o
r co
ntro
ls, a
s wel
l as e
xter
nal e
vent
s. O
pera
tiona
l ris
k in
clud
es le
gal r
isk
but e
xclu
des r
eput
atio
nal r
isk
and
risk
ari
sing
from
stra
tegi
c de
cisi
ons.
O
pera
tiona
l risk
has
bee
n id
entif
ied
as a
ris
k th
at sh
ould
be
expl
icitl
y ad
dres
sed
in th
e R
BC
form
ulas
. T
he O
pera
tiona
l Ris
k ch
arge
is in
tend
ed to
acc
ount
for
oper
atio
nal r
isks
that
are
not
alr
eady
ref
lect
ed in
exi
stin
g ri
sk c
ateg
orie
s.
An
oper
atio
nal r
isk
char
ge w
ill b
e re
port
ed o
n L
ine
38 u
sing
a p
erce
ntag
e of
RB
C o
r “a
dd-o
n” a
ppro
ach
that
will
app
ly a
risk
fact
or o
f 0.0
0% to
the
amou
nt
repo
rted
in
Lin
e (3
7) -
RBC
aft
er C
ovar
ianc
e B
efor
e O
pera
tiona
l Ris
k re
port
ed o
n pa
ge X
R02
5.
Tot
al R
BC A
fter
Cov
aria
nce
incl
udin
g O
pera
tiona
l Ris
k w
ill b
e re
port
ed in
Lin
e (3
9) a
s the
sum
of l
ines
(37)
and
(38)
.
Aut
horiz
ed C
ontro
l Lev
el R
BC
is c
ompu
ted
from
the
RB
C a
fter C
ovar
ianc
e an
d is
set a
t 50
perc
ent o
f RB
C a
fter C
ovar
ianc
e in
clud
ing
Ope
ratio
nal R
isk.
Com
pany
Act
ion
Leve
l R
BC
is
200
perc
ent
of A
utho
rized
Con
trol
Leve
l R
BC
. R
egul
ator
y A
ctio
n Le
vel
RB
C i
s 15
0 pe
rcen
t of
Aut
horiz
ed C
ontro
l Le
vel
RB
C.
Man
dato
ry C
ontro
l Lev
el R
BC
is 7
0 pe
rcen
t of A
utho
rized
Con
trol L
evel
RB
C.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
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nce
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39
10/2
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17
TO
TA
L A
DJU
STE
D C
API
TA
L
XR
026
Tota
l Adj
uste
d C
apita
l (TA
C) i
nclu
des
the
stat
utor
y ca
pita
l and
sur
plus
/tota
l net
wor
th o
f the
repo
rting
ent
ity p
lus
adju
stm
ents.
Adj
ustm
ents
are
mad
e in
reco
gniti
on o
f st
atut
ory
acco
untin
g co
nven
tions
that
tend
to u
nder
stat
e th
e ac
tual
cap
ital a
nd su
rplu
s tha
t a c
ompa
ny p
osse
sses
in c
ase
of li
quid
atio
n.
Ther
e ar
e ad
ditio
ns to
TA
C fo
r the
Ass
et V
alua
tion
Res
erve
and
hal
f of t
he d
ivid
end
liabi
lity
of a
ny L
ife/H
ealth
sub
sidi
ary.
The
se re
serv
es u
nder
stat
e th
e su
rplu
s of
the
subs
idia
ry a
nd m
ust b
e ad
ded
back
to th
e pa
rent
’s T
AC
. The
ann
ual s
tate
men
t am
ount
of a
ny L
ife/H
ealth
sub
sidi
ary’
s A
VR
sho
uld
be re
porte
d on
Lin
e (2
), pr
orat
ed fo
r pe
rcen
t of o
wne
rshi
p. D
ivid
end
liabi
lity
for l
ife in
sura
nce
subs
sho
uld
be re
porte
d on
Lin
e (3
). Th
e po
rtion
of t
he A
VR
that
can
be
coun
ted
as c
apita
l is
limite
d to
the
amou
nt n
ot u
tiliz
ed in
ass
et a
dequ
acy
test
ing
in su
ppor
t of t
he A
ctua
rial O
pini
on fo
r res
erve
s.
Subs
idia
ry a
mou
nts
are
incl
uded
, as
app
ropr
iate
, re
cogn
izin
g th
at t
he s
ubsi
diar
y’s
surp
lus
is i
nclu
ded
with
in t
he s
urpl
us o
f th
e pa
rent
. Fo
r Pr
oper
ty a
nd C
asua
lty
subs
idia
ries,
ther
e is
a r
educ
tion
in T
AC
equ
al to
non
-tabu
lar
disc
ount
s an
d m
edic
al d
isco
unts
rep
orte
d as
tabu
lar
that
the
subs
idia
ry m
ay c
laim
. Dis
coun
ting
of lo
ss
rese
rves
is
not
wid
ely
prac
ticed
in
Prop
erty
/Cas
ualty
acc
ount
ing.
The
refo
re,
any
of t
hese
dis
coun
ts b
eing
use
d by
a P
rope
rty/C
asua
lty s
ubsi
diar
y to
bol
ster
the
su
bsid
iary
’s su
rplu
s mus
t be
rem
oved
to e
nsur
e a
leve
l pla
ying
fiel
d am
ong
com
pani
es su
bjec
t to
RB
C. I
f the
repo
rting
ent
ity o
wns
a P
rope
rty/C
asua
lty su
bsid
iary
that
has
no
n-ta
bula
r di
scou
nts
or m
edic
al d
isco
unts
rep
orte
d as
tab
ular
, th
e fu
ll am
ount
of
the
rese
rve
disc
ount
sho
uld
be e
nter
ed o
n Li
nes
(4)
and
(5).
Non
tabu
lar
rese
rve
disc
ount
s rep
orte
d in
Lin
e (5
) com
e fr
om th
e su
bsid
iary
’s S
ched
ule
P Pa
rt 1.
Tab
ular
rese
rves
in L
ine
(4) c
ome
from
the
Not
es to
the
Fina
ncia
l Sta
tem
ent o
f the
aff
iliat
e’s
annu
al st
atem
ent.
Line
s (7
) thr
ough
(11)
are
use
d fo
r a s
ensi
tivity
test
. The
sen
sitiv
ity te
st p
rovi
des
a “w
hat i
f” s
cena
rio e
limin
atin
g de
ferr
ed ta
x as
sets
and
def
erre
d ta
x lia
bilit
ies
from
the
calc
ulat
ion
of T
otal
Adj
uste
d C
apita
l. Th
e se
nsiti
vity
test
has
no
effe
ct o
n th
e ris
k-ba
sed
capi
tal a
mou
nts r
epor
ted
in th
e an
nual
stat
emen
t.
DTA
sho
uld
incl
ude
only
the
adm
itted
por
tion
of t
he D
TA i
nsid
e am
ount
, for
Lin
e (7
). Li
ne (
9) s
houl
d on
ly i
nclu
de t
he a
dmitt
ed p
ortio
n of
ins
uran
ce s
ubsi
diar
ies
defe
rred
tax
asse
ts th
at a
re su
bjec
t to
RB
C a
nd w
hose
RB
C fo
rmul
a ex
clud
es D
TAs a
nd D
TLs f
rom
the
TAC
cal
cula
tion.
Line
s (1
6) th
roug
h (1
9) a
re u
sed
for t
he fe
dera
l AC
A fe
e se
nsiti
vity
test
. The
AC
A fe
e se
nsiti
vity
test
pro
vide
s a
“wha
t if”
sce
nario
elim
inat
ing
the
AC
A fe
e fr
om th
e C
alcu
latio
n of
Tot
al A
djus
ted
Cap
ital.
The
ACA
fee
incl
uded
on
Line
(16)
is th
e es
timat
ed d
ata
year
am
ount
that
is to
be
paid
in th
e fe
e ye
ar. T
he A
CA
fee
sens
itivi
ty te
st
has
no e
ffec
t on
the
risk-
base
d ca
pita
l am
ount
s re
porte
d in
the
annu
al s
tate
men
t. C
olum
n (2
), Li
ne (1
6) s
houl
d eq
ual t
he a
nnua
l sta
tem
ent N
otes
to F
inan
cial
Sta
tem
ent,
Not
e 22
B, C
olum
n 1.
CO
MPA
RIS
ON
OF
TO
TA
L A
DJU
STE
D C
API
TA
L T
O R
ISK
-BA
SED
CA
PIT
AL
X
R02
7
As
long
as
the
Tota
l Adj
uste
d C
apita
l (TA
C)
show
n on
Lin
e (1
) of
Com
paris
on o
f To
tal A
djus
ted
Cap
ital t
o R
isk-
Bas
ed C
apita
l sec
tion
exce
eds
the
Com
pany
Act
ion
Leve
l Ris
k-B
ased
Cap
ital (
CA
LRB
C) s
how
n on
Lin
e (2
), th
e re
porti
ng e
ntity
has
pas
sed
the
min
imum
cap
ital a
dequ
acy
test
of t
he H
ealth
RB
C fo
rmul
a. H
owev
er, t
hat
does
not
nec
essa
rily
mea
n th
at th
e re
porti
ng e
ntity
is fi
nanc
ially
sou
nd. T
he R
BC
form
ula
is ju
st o
ne o
f man
y re
gula
tory
tool
s use
d by
regu
lato
rs to
eva
luat
e th
e fin
anci
al
heal
th o
f reg
ulat
ed e
ntiti
es. A
lthou
gh h
ealth
y co
mpa
nies
rare
ly fa
il th
e R
BC
test
, wea
k co
mpa
nies
ofte
n do
pas
s th
e R
BC
test
, alth
ough
wea
k co
mpa
nies
will
eve
ntua
lly
fail
the
test
if th
eir p
robl
ems c
ontin
ue.
Thos
e or
gani
zatio
ns th
at d
o tri
gger
one
of t
he R
BC
act
ion
leve
ls a
re g
ener
ally
subj
ect t
o re
gula
tory
act
ion
by th
e st
ate
of d
omic
ile, o
r by
a no
n-do
mic
iliar
y st
ate
whe
re th
e re
porti
ng e
ntity
doe
s bu
sine
ss, u
nder
the
pro
visi
ons
of s
tate
law
. The
NA
IC R
isk-
Base
d Ca
pita
l (R
BC)
for
Hea
lth O
rgan
izat
ions
Mod
el A
ct (
#315
) pr
ovid
es f
or a
n
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
40
10/2
0/20
17
incr
easi
ngly
stri
ngen
t reg
ulat
ory
resp
onse
for
com
pani
es th
at tr
igge
r on
e of
the
RB
C a
ctio
n le
vels
. Tho
se a
ctio
n le
vels
are
(1)
Com
pany
Act
ion
Leve
l, (2
) R
egul
ator
y A
ctio
n Le
vel,
(3) A
utho
rized
Con
trol L
evel
and
(4) M
anda
tory
Con
trol L
evel
.
The
four
RB
C a
ctio
n le
vels
trig
ger a
n in
crea
sing
ly s
tring
ent l
evel
of r
egul
ator
y re
spon
se fo
r tho
se c
ompa
nies
that
trig
ger o
ne o
f the
act
ion
leve
ls. L
ines
(2) t
hrou
gh (6
) w
ill b
e ca
lcul
ated
aut
omat
ical
ly b
y th
e pr
ogra
m. O
ne o
f the
follo
win
g ac
tion
leve
ls w
ill a
ppea
r on
Line
(6).
Com
pany
Act
ion
Leve
l (TA
C is
bet
wee
n 15
0 pe
rcen
t and
200
per
cent
of t
he A
utho
rized
Con
trol L
evel
RB
C).
Reg
ulat
ory
Act
ion
Leve
l (TA
C is
bet
wee
n 10
0 pe
rcen
t and
150
per
cent
of t
he A
utho
rized
Con
trol L
evel
RB
C).
Aut
horiz
ed C
ontro
l Lev
el (T
AC
is b
etw
een
70 p
erce
nt a
nd 1
00 p
erce
nt o
f the
Aut
horiz
ed C
ontro
l Lev
el R
BC
). M
anda
tory
Con
trol L
evel
(TA
C le
ss th
an 7
0 pe
rcen
t of t
he A
utho
rized
Con
trol L
evel
RB
C).
Com
pany
Act
ion
Leve
l re
quire
s th
e re
porti
ng e
ntity
to
prep
are
and
subm
it to
the
ins
uran
ce c
omm
issi
oner
a c
ompr
ehen
sive
fin
anci
al p
lan.
The
pla
n id
entif
ies
the
cond
ition
s th
at c
ontri
bute
d to
the
com
pany
’s f
inan
cial
con
ditio
n, c
onta
ins
prop
osal
s to
cor
rect
the
com
pany
’s f
inan
cial
pro
blem
s, an
d pr
ovid
es p
roje
ctio
ns o
f th
e co
mpa
ny’s
fina
ncia
l con
ditio
n, b
oth
with
and
with
out t
he p
ropo
sed
corr
ectio
ns.
Reg
ulat
ory
Act
ion
Leve
l req
uire
s the
repo
rting
ent
ity to
subm
it a
com
preh
ensi
ve fi
nanc
ial p
lan.
In a
dditi
on, t
he in
sura
nce
com
mis
sion
er m
ay p
erfo
rm a
ny e
xam
inat
ions
or
anal
ysis
of t
he re
porti
ng e
ntity
’s b
usin
ess a
nd o
pera
tions
that
it d
eem
s nec
essa
ry, a
nd is
sue
any
appr
opria
te c
orre
ctiv
e or
ders
to a
ddre
ss th
e co
mpa
ny’s
fina
ncia
l pro
blem
s.
Aut
horiz
ed C
ontro
l Lev
el a
utho
rizes
the
insu
ranc
e co
mm
issi
oner
to ta
ke w
hate
ver r
egul
ator
y ac
tions
con
side
red
nece
ssar
y to
pro
tect
the
best
inte
rest
of t
he p
olic
yhol
ders
an
d cr
edito
rs o
f the
repo
rting
ent
ity w
hich
may
incl
ude
the
actio
ns n
eces
sary
to c
ause
the
insu
rer t
o be
pla
ced
unde
r reg
ulat
ory
cont
rol (
i.e.,
reha
bilit
atio
n or
liqu
idat
ion)
.
Man
dato
ry C
ontro
l Lev
el re
quire
s the
insu
ranc
e co
mm
issi
oner
to p
lace
the
repo
rting
ent
ity u
nder
regu
lato
ry c
ontro
l.
Tre
nd T
est
A c
ompa
ny w
hose
RB
C r
atio
is
betw
een
200
perc
ent
and
300
perc
ent
and
com
bine
d ra
tio i
s gr
eate
r th
an 1
05 p
erce
nt c
ould
trig
ger
a C
ompa
ny A
ctio
n Le
vel
RB
C
regu
lato
ry a
ctio
n pe
r th
e Tr
end
Test
. Th
e ca
lcul
atio
n is
info
rmat
iona
l-onl
y un
til s
tate
sta
tute
s ar
e im
plem
ente
d so
that
the
trend
test
wou
ld tr
igge
r a
Com
pany
Act
ion
Leve
l RB
C re
gula
tory
act
ion
per t
he st
atut
e.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
41
10/2
0/20
17
APP
EN
DIX
1 –
CO
MM
ON
LY
USE
D T
ER
MS
The
Def
initi
ons o
f Com
mon
ly U
sed
Term
s are
freq
uent
ly d
uplic
ates
from
the
mai
n bo
dy o
f the
text
. If t
here
are
any
inco
nsis
tenc
ies b
etw
een
the
defin
ition
s in
this
sect
ion
and
the
defin
ition
s in
the
mai
n bo
dy o
f the
inst
ruct
ions
, the
mai
n bo
dy d
efin
ition
shou
ld b
e us
ed.
Adm
inis
trat
ive
Exp
ense
s –
Cos
ts a
ssoc
iate
d w
ith th
e ov
eral
l man
agem
ent a
nd o
pera
tions
of t
he re
porti
ng e
ntity
that
are
not
dire
ctly
rela
ted
to, o
r in
dire
ct s
uppo
rt of
pr
ovid
ing
med
ical
ser
vice
s. Ex
pens
es t
o ad
min
iste
r A
SC, A
SO b
usin
ess,
and
rela
ted
reve
nue
mus
t be
ide
ntifi
ed s
epar
atel
y fr
om u
nder
writ
ten
busi
ness
. Com
mis
sion
pa
ymen
ts a
nd p
rem
ium
taxe
s are
exc
lude
d fo
r RB
C c
alcu
latio
n pu
rpos
es.
Adm
inis
trat
ive
Serv
ices
Con
trac
t (A
SC) –
A c
ontra
ct w
here
the
repo
rting
ent
ity a
gree
s to
pro
vide
adm
inis
trativ
e se
rvic
es s
uch
as c
laim
s pr
oces
sing
for a
third
par
ty
that
is a
t ris
k, a
nd a
ccor
ding
ly, t
he a
dmin
istra
tor h
as n
ot is
sued
an
insu
ranc
e po
licy,
rega
rdle
ss o
f whe
ther
an
iden
tific
atio
n ca
rd is
issu
ed. T
he a
dmin
istra
tor m
ay a
rran
ge
for p
rovi
sion
of m
edic
al s
ervi
ces
thro
ugh
a co
ntra
cted
or e
mpl
oyed
pro
vide
r net
wor
k. T
he p
lan
(whe
ther
insu
red
by a
noth
er re
porti
ng e
ntity
or s
elf-
insu
red)
bea
rs a
ll of
th
e in
sura
nce
risk,
and
ther
e is
not
pos
sibi
lity
of lo
ss o
r lia
bilit
y to
the
adm
inis
trato
r ca
used
by
clai
ms
incu
rred
rel
ated
to th
e pl
an. C
laim
s ar
e pa
id f
rom
the
repo
rting
en
tity’
s ow
n ba
nk a
ccou
nts,
and
only
sub
sequ
ently
rec
eive
s re
imbu
rsem
ent
from
the
uni
nsur
ed p
lan
spon
sor.
No
arra
ngem
ent
whe
re t
he r
epor
ting
entit
y re
ceiv
es a
ca
pita
ted
paym
ent f
or p
rovi
ding
med
ical
serv
ices
to a
third
par
ty sh
all q
ualif
y as
an
unin
sure
d pl
an.
ASC
Rei
mbu
rsem
ents
– F
unds
rec
eive
d by
the
rep
ortin
g en
tity
unde
r an
ASC
con
tract
as
reim
burs
emen
t fo
r cl
aim
s pa
ymen
ts a
nd f
or e
xpen
ses
asso
ciat
ed w
ith
adm
inis
terin
g th
e co
ntra
ct.
Adm
inis
trat
ive
Serv
ices
Onl
y (A
SO) –
A c
ontra
ct w
here
the
repo
rting
ent
ity a
gree
s to
pro
vide
adm
inis
trativ
e se
rvic
es s
uch
as c
laim
s pr
oces
sing
for a
third
par
ty th
at is
at
ris
k, a
nd a
ccor
ding
ly, t
he a
dmin
istra
tor
has
not i
ssue
d an
insu
ranc
e po
licy,
reg
ardl
ess
of w
heth
er a
n id
entif
icat
ion
card
is is
sued
. The
adm
inis
trato
r m
ay a
rran
ge f
or
prov
isio
n of
med
ical
ser
vice
s th
roug
h a
cont
ract
ed o
r em
ploy
ed p
rovi
der n
etw
ork.
The
pla
n (w
heth
er in
sure
d by
ano
ther
repo
rting
ent
ity o
r sel
f-in
sure
d) b
ears
all
of th
e in
sura
nce
risk,
and
ther
e is
not
pos
sibi
lity
of lo
ss o
r lia
bilit
y to
the
adm
inis
trato
r cau
sed
by c
laim
s inc
urre
d re
late
d to
the p
lan.
Cla
ims a
re p
aid
from
a b
ank
acco
unt o
wne
d an
d fu
nded
dire
ctly
by
the
unin
sure
d pl
an s
pons
or; o
r, cl
aim
s ar
e pa
id fr
om a
ban
k ac
coun
t ow
ned
by th
e re
porti
ng e
ntity
, but
onl
y af
ter t
he re
porti
ng e
ntity
has
rece
ived
fu
nds
from
the
unin
sure
d pl
an s
pons
or th
at a
re a
dequ
ate
to fu
lly c
over
the
clai
m p
aym
ents
. No
arra
ngem
ent w
here
the
repo
rting
ent
ity re
ceiv
es a
cap
itate
d pa
ymen
t for
pr
ovid
ing
med
ical
serv
ices
to a
third
par
ty sh
all q
ualif
y as
an
unin
sure
d pl
an.
ASO
Rei
mbu
rsem
ents
– F
unds
rece
ived
by
the
repo
rting
ent
ity u
nder
an
ASO
con
tract
as a
fee
for e
xpen
ses a
ssoc
iate
d w
ith a
dmin
iste
ring
the
cont
ract
.
Adm
itted
Ass
ets –
Ass
ets r
ecog
nize
d an
d ac
cept
ed b
y a
stat
e co
mm
issi
oner
, dire
ctor
or s
uper
inte
nden
t in
dete
rmin
ing
the
solv
ency
of t
he re
porti
ng e
ntity
.
Aff
iliat
e –
a pe
rson
or
entit
y th
at d
irect
ly, o
r in
dire
ctly
thro
ugh
one
or m
ore
othe
r pe
rson
s or
ent
ities
, con
trols
, is
cont
rolle
d by
, or
is u
nder
com
mon
con
trol w
ith th
e re
porti
ng e
ntity
.
Agg
rega
te C
ost P
aym
ents
– T
he "
aggr
egat
e co
st"
met
hod
of re
imbu
rsem
ent m
eans
whe
re a
hea
lth p
lan
has
a re
imbu
rsem
ent p
lan
with
a c
orpo
rate
ent
ity th
at d
irect
ly
prov
ides
car
e, w
here
(1) t
he h
ealth
pla
n is
con
tract
ually
requ
ired
to p
ay th
e to
tal o
pera
ting
cost
s of
the
corp
orat
e en
tity,
less
any
inco
me
to th
e en
tity
from
oth
er u
sers
of
serv
ices
; an
d (2
) th
ere
are
mut
ual
unlim
ited
guar
ante
es o
f so
lven
cy b
etw
een
the
entit
y an
d th
e he
alth
pla
n, w
hich
put
the
ir re
spec
tive
capi
tal
and
surp
lus
at r
isk
in
guar
ante
eing
eac
h ot
her.
Cla
ims
– Pa
ymen
ts m
ade
for
med
ical
ser
vice
s ar
rang
ed f
or o
r pr
ovid
ed b
y th
e he
alth
ent
ity to
its
mem
bers
, inc
ludi
ng p
aym
ents
for
dire
ct s
uppo
rt of
med
ical
ser
vice
s ar
rang
ed o
r pro
vide
d by
the
heal
th e
ntity
, les
s fee
-for
-ser
vice
reve
nue
dire
ctly
rela
ted
to su
ch p
aym
ents
. Pay
men
ts fo
r ser
vice
s ren
dere
d to
non
-mem
bers
of a
hea
lth e
ntity
ar
e ex
clud
ed fr
om c
laim
s, an
d as
soci
ated
fee
for s
ervi
ce re
venu
e m
ay n
ot b
e de
duct
ed fr
om c
laim
s, ex
cept
in c
ases
whe
re n
on-c
ontin
gent
sal
arie
s ar
e pa
id to
em
ploy
ee
prov
ider
s reg
ardl
ess o
f whe
ther
they
pro
vide
car
e to
mem
bers
or n
on-m
embe
rs o
f the
hea
lth e
ntity
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
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nce
Com
mis
sion
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42
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0/20
17
Hea
lth C
are
Del
iver
y A
sset
s –
Land
, bui
ldin
gs, e
quip
men
t an
d su
pplie
s us
ed d
irect
ly t
o de
liver
hea
lth c
are
to m
embe
rs a
s de
fined
by
SSAP
No.
73—
Hea
lth C
are
Del
iver
y As
sets
and
Leas
ehol
d Im
prov
emen
ts in
Hea
lth C
are
Faci
litie
s.
Hea
lth C
are
Rec
eiva
ble
– Fe
e-fo
r-se
rvic
e, c
oord
inat
ion
of b
enef
its a
nd s
ubro
gatio
n, c
o-pa
ymen
ts,
and
othe
r he
alth
bal
ance
s. Fo
r R
BC
pur
pose
s, ex
clud
e A
SC
reim
burs
emen
ts d
ue a
nd re
insu
ranc
e re
cove
ries.
Hea
lth E
ntity
– A
ny is
suer
of a
pol
icy
or c
ontra
ct p
rovi
ding
or o
ffer
ing
to p
rovi
de a
pla
n of
Com
preh
ensi
ve M
edic
al a
nd H
ospi
tal;
Med
icar
e Su
pple
men
t; D
enta
l/Vis
ion;
St
and-
Alo
ne M
edic
are
Part
D C
over
age
or O
ther
hea
lth b
enef
its th
roug
h in
divi
dual
or g
roup
pla
ns a
nd w
hich
file
s th
e H
ealth
Ann
ual S
tate
men
t bla
nk. T
he te
rm H
ealth
En
tity
was
pre
viou
sly
expa
nded
and
repl
aced
MC
O b
egin
ning
in th
e 20
15 in
stru
ctio
ns.
Hos
pita
l Ind
emni
ty C
over
age
– C
over
age
that
pro
vide
s a
pre-
dete
rmin
ed, f
ixed
ben
efit
or d
aily
inde
mni
ty fo
r con
tinge
ncie
s ba
sed
on a
sta
y in
a h
ospi
tal o
r int
ensi
ve
care
faci
lity.
Inte
rmed
iary
– A
per
son,
cor
pora
tion
or o
ther
bus
ines
s en
tity
(not
lice
nsed
as
a m
edic
al p
rovi
der)
that
arr
ange
s, by
con
tract
s w
ith p
hysi
cian
s an
d ot
her l
icen
sed
med
ical
pr
ovid
ers,
to d
eliv
er h
ealth
serv
ices
for a
repo
rting
ent
ity a
nd it
s enr
olle
es v
ia a
sepa
rate
con
tract
bet
wee
n th
e in
term
edia
ry a
nd th
e re
porti
ng e
ntity
.
Man
aged
Car
e O
rgan
izat
ion
(MC
O)
– A
ny p
erso
n, c
orpo
ratio
n or
oth
er e
ntity
whi
ch e
nter
s in
to a
rran
gem
ents
or
agre
emen
ts w
ith l
icen
sed
med
ical
pro
vide
rs o
r in
term
edia
ries
for
the
purp
ose
of p
rovi
ding
or
offe
ring
to p
rovi
de a
pla
n of
hea
lth b
enef
its d
irect
ly to
indi
vidu
als
or e
mpl
oyer
gro
ups
in c
onsi
dera
tion
for
an a
dvan
ce
perio
dic
char
ge (p
rem
ium
) per
mem
ber c
over
ed.
Max
imum
Ret
aine
d R
isk
– Th
e m
axim
um le
vel o
f pot
entia
l cla
im e
xpos
ure
(cap
ped
at $
750,
000
for m
edic
al c
over
age
and
$25,
000
for a
ll ot
her c
over
age)
resu
lting
from
co
vera
ge o
n a
sing
le m
embe
r of
a r
epor
ting
entit
y. M
axim
um r
etai
ned
risk
for
repo
rting
ent
ities
pro
vidi
ng “
prof
essi
onal
com
pone
nt”
(non
-hos
pita
l) co
vera
ge w
ill b
e ca
pped
at $
375,
000.
Whe
re s
peci
fic s
top-
loss
rein
sura
nce
prot
ectio
n is
in p
lace
, thi
s is
equ
al to
the
high
est a
ttach
men
t poi
nt o
n su
ch s
top-
loss
rein
sura
nce,
sub
ject
to th
e fo
llow
ing:
Whe
re c
over
age
unde
r th
e st
op-lo
ss p
rote
ctio
n (p
lus
rete
ntio
n) w
ith th
e hi
ghes
t atta
chm
ent p
oint
is c
appe
d at
less
than
$75
0,00
0 pe
r m
embe
r ($
375,
000
for
repo
rting
ent
ities
pro
vidi
ng “
prof
essi
onal
com
pone
nt”
cove
rage
onl
y), t
he m
axim
um r
etai
ned
loss
will
be
equa
l to
such
atta
chm
ent p
oint
plu
s th
e di
ffer
ence
be
twee
n th
e co
vera
ge (p
lus r
eten
tion)
and
$75
0,00
0.
Whe
re th
e st
op-lo
ss la
yer
is s
ubje
ct to
par
ticip
atio
n by
the
repo
rting
ent
ity, t
he m
axim
um r
etai
ned
risk
as c
alcu
late
d ab
ove
will
be
incr
ease
d by
the
repo
rting
en
tity’
s par
ticip
atio
n in
the
stop
-loss
laye
r (up
to $
750,
000
less
rete
ntio
n).
Non
-Adm
itted
Ass
ets –
Ass
ets t
hat a
re n
ot a
ccep
ted
by a
stat
e co
mm
issi
oner
or s
uper
inte
nden
t in
dete
rmin
ing
the
solv
ency
of t
he re
porti
ng e
ntity
.
Non
-Con
tinge
nt S
alar
ies –
Sal
arie
s pa
id to
pro
vide
rs o
f med
ical
car
e w
hich
can
not b
e ad
just
ed b
ased
upo
n ut
iliza
tion
of s
ervi
ces (
e.g.
, # o
f pat
ient
s se
en o
r the
inte
nsity
of
the
illne
sses
trea
ted)
.
Prem
ium
s –
This
is th
e am
ount
of
mon
ey c
harg
ed b
y th
e re
porti
ng e
ntity
for
the
spec
ified
ben
efit
plan
. It i
s th
e pr
epai
d (u
sual
ly o
n a
per
mem
ber
per
mon
th b
asis
) pa
ymen
ts m
ade
by a
cov
ered
gro
up o
r ind
ivid
ual t
o th
e re
porti
ng e
ntity
in e
xcha
nge
for s
ervi
ces t
o be
pro
vide
d or
off
ered
by
such
org
aniz
atio
n.
Prof
essi
onal
Ser
vice
s – H
ealth
car
e se
rvic
es p
rovi
ded
by a
phy
sici
an o
r oth
er h
ealth
car
e pr
actit
ione
r lic
ense
d, a
ccre
dite
d, o
r cer
tifie
d to
per
form
spec
ified
hea
lth se
rvic
es
cons
iste
nt w
ith st
ate
law
.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
43
10/2
0/20
17
Prov
ider
Sto
p-L
oss
– C
over
age
affo
rded
to
a pr
ovid
er v
ia t
he r
isk-
shar
ing
mec
hani
sms
with
in t
he r
epor
ting
entit
y’s
cont
ract
with
suc
h pr
ovid
er i
n ex
chan
ge f
or a
re
duce
d pa
ymen
t to
the
prov
ider
. Als
o in
clud
es in
sura
nce
(not
rein
sura
nce)
pur
chas
ed b
y th
e pr
ovid
er (o
r an
inte
rmed
iary
) dire
ctly
from
a li
cens
ed in
sure
r.
Reg
ulat
ed In
term
edia
ry –
An
inte
rmed
iary
(aff
iliat
ed o
r not
) sub
ject
to st
ate
regu
latio
n an
d fil
es th
e H
ealth
RB
C fo
rmul
a w
ith th
e st
ate.
(see
als
o In
term
edia
ry)
Rei
nsur
ance
– A
n ag
reem
ent b
etw
een
a re
porti
ng e
ntity
and
a li
cens
ed (r
e)in
sure
r whe
reby
the
rein
sure
r agr
ees,
in e
xcha
nge
for a
pre
miu
m, t
o in
dem
nify
the
repo
rting
en
tity
on a
pro
porti
onal
or n
on-p
ropo
rtion
al b
asis
, aga
inst
a sp
ecifi
ed p
art o
f the
cos
t of p
rovi
ding
a p
lan
of h
ealth
ben
efits
to it
s enr
olle
d gr
oups
and
indi
vidu
als.
Ris
k R
even
ue –
Am
ount
s ch
arge
d by
the
repo
rting
ent
ity a
s a
prov
ider
or
inte
rmed
iary
for
spe
cifie
d m
edic
al s
ervi
ces
prov
ided
to
the
polic
yhol
ders
or
mem
bers
of
anot
her i
nsur
er o
r hea
lth e
ntity
. Unl
ike
prem
ium
s, w
hich
are
col
lect
ed fr
om a
n em
ploy
er g
roup
or i
ndiv
idua
l mem
ber,
risk
reve
nue
is th
e pr
epai
d (u
sual
ly o
n a
capi
tate
d ba
sis)
pay
men
ts, m
ade
by a
noth
er in
sure
r or
hea
lth e
ntity
to th
e re
porti
ng e
ntity
in e
xcha
nge
for
serv
ices
to b
e pr
ovid
ed o
r of
fere
d by
suc
h or
gani
zatio
n. P
aym
ents
to
prov
ider
s und
er ri
sk re
venu
e ar
rang
emen
ts a
re in
clud
ed in
the
RB
C c
alcu
latio
n at
the
sam
e fa
ctor
as p
rem
ium
s and
are
subj
ect t
o th
e sa
me
man
aged
car
e cr
edit
cate
gorie
s. N
OTE
: RIS
K R
EVEN
UE
IS V
ERY
SIM
ILAR
TO
REI
NSU
RAN
CE
ASSU
MED
.
Spec
ified
Dis
ease
Cov
erag
e –
Cov
erag
e th
at p
rovi
des p
rimar
ily p
re-d
eter
min
ed b
enef
its fo
r exp
ense
s for
the
care
of c
ance
r and
/or o
ther
spec
ified
dis
ease
s.
Stop
-Los
s C
over
age
– C
over
age
for a
sel
f-in
sure
d gr
oup
plan
, a p
rovi
der/p
rovi
der g
roup
or n
on-p
ropo
rtion
al re
insu
ranc
e of
a m
edic
al in
sura
nce
prod
uct.
Cov
erag
e m
ay
appl
y on
a s
peci
fic b
asis
, an
aggr
egat
e ba
sis
or b
oth.
Spe
cific
cov
erag
e m
eans
that
the
stop
-loss
car
rier's
risk
beg
ins
afte
r a m
inim
um o
f at l
east
$5,
000
of c
laim
s fo
r any
on
e co
vere
d Li
fe h
as b
een
cove
red
by th
e gr
oup
plan
, pro
vide
r/pro
vide
r gro
up o
r dire
ct w
riter
. Agg
rega
te c
over
age
mea
ns th
at th
e st
op-lo
ss c
arrie
r’s
risk
begi
ns a
fter t
he
grou
p pl
an, p
rovi
der/p
rovi
der g
roup
or d
irect
writ
er h
as re
tain
ed a
t lea
st 9
0 pe
rcen
t of e
xpec
ted
clai
ms,
or th
e ec
onom
ic e
quiv
alen
t.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
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nce
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sion
ers
44
10/2
0/20
17
APP
EN
DIX
2 –
CO
MM
ON
LY
USE
D T
ER
MS
FOR
ME
DIC
AR
E P
AR
T D
CO
VE
RA
GE
The
U.S
. Cen
ters
for
Med
icar
e an
d M
edic
aid
Serv
ices
(C
MS)
ove
rsee
s th
e M
edic
are
Part
D p
resc
riptio
n dr
ug c
over
age,
incl
udin
g bo
th c
over
age
prov
ided
thro
ugh
a st
and-
alon
e Pr
escr
iptio
n D
rug
Plan
(PD
P) a
nd c
over
age
prov
ided
as
part
of a
Med
icar
e A
dvan
tage
pla
n. C
MS
ascr
ibes
a s
peci
fic m
eani
ng to
mos
t of t
he fo
llow
ing
term
s, an
d th
e R
BC
for
mul
as h
ave
adop
ted
that
ter
min
olog
y to
red
uce
the
pote
ntia
l fo
r m
isin
terp
reta
tion.
Oth
er t
erm
s ha
ve b
een
defin
ed b
elow
in
orde
r to
fac
ilita
te t
he
appr
opria
te a
pplic
atio
n of
the
RB
C fo
rmul
a.
Ben
efic
iary
Pre
miu
m (S
tand
ard
Cov
erag
e Po
rtio
n) –
The
am
ount
rece
ived
from
the
Part
D e
nrol
lee
(dire
ctly
, or f
rom
CM
S af
ter b
eing
with
held
from
Soc
ial S
ecur
ity
bene
fits)
as
paym
ent f
or th
e St
anda
rd C
over
age.
Thi
s in
clud
es a
ny la
te e
nrol
lmen
t pen
altie
s th
at th
e PD
P Sp
onso
r rec
eive
s fo
r an
enro
llee.
The
Ben
efic
iary
Pre
miu
m is
ac
coun
ted
for a
s hea
lth p
rem
ium
.
Ben
efic
iary
Pre
miu
m (
Supp
lem
enta
l B
enef
it Po
rtio
n) –
The
am
ount
rec
eive
d fr
om t
he P
art
D e
nrol
lee
(dire
ctly
, or
fro
m C
MS
afte
r be
ing
with
held
fro
m S
ocia
l Se
curit
y be
nefit
s) a
s pay
men
t for
Sup
plem
enta
l Ben
efits
. The
Ben
efic
iary
Pre
miu
m is
acc
ount
ed fo
r as h
ealth
pre
miu
m.
Cov
erag
e Y
ear
Rec
onci
liatio
n –
Rec
onci
liatio
n m
ade
afte
r th
e cl
ose
of e
ach
cale
ndar
yea
r, to
det
erm
ine
the
amou
nts
that
a P
DP
Spon
sor
is e
ntitl
ed to
for
the
Low
-In
com
e Su
bsid
y (C
ost-S
harin
g Po
rtion
), th
e R
eins
uran
ce P
aym
ent,
and
the
Ris
k C
orrid
or P
aym
ent A
djus
tmen
t. To
the
exte
nt th
at in
terim
pay
men
ts (i
f any
) fro
m C
MS
exce
eded
the
amou
nts d
eter
min
ed b
y th
e re
conc
iliat
ion,
the
PDP
Spon
sor m
ust r
etur
n th
e ex
cess
to th
e go
vern
men
t: to
the
exte
nt th
at in
terim
pay
men
ts (i
f any
) fro
m C
MS
fell
shor
t of
the
amou
nts
dete
rmin
ed b
y th
e re
conc
iliat
ion,
the
gove
rnm
ent w
ill m
ake
an a
dditi
onal
pay
men
t to
the
PDP
Spon
sor.
The
Cov
erag
e Y
ear
Rec
onci
liatio
n re
sults
in th
e Lo
w-I
ncom
e Su
bsid
y (C
ost-S
harin
g Po
rtion
) an
d th
e R
eins
uran
ce P
aym
ent b
eing
ess
entia
lly a
sel
f-in
sure
d (b
y th
e go
vern
men
t) co
mpo
nent
of
the
Part
D
cove
rage
, sub
ject
to S
SAP
No. 4
7—U
nins
ured
Pla
ns. T
he C
over
age
Yea
r R
econ
cilia
tion
also
res
ults
in th
e tre
atm
ent o
f th
e R
isk
Cor
ridor
Pay
men
t Adj
ustm
ent a
s a
retro
spec
tive
prem
ium
adj
ustm
ent,
subj
ect t
o SS
AP N
o. 6
6—Re
tros
pect
ivel
y Ra
ted
Con
tract
s.
Dir
ect S
ubsi
dy –
The
am
ount
the
gove
rnm
ent p
ays t
o th
e PD
P Sp
onso
r for
the
Stan
dard
Cov
erag
e. T
hese
pay
men
ts a
re a
ccou
nted
for a
s hea
lth p
rem
ium
.
Low
-Inc
ome
Subs
idy
(Cos
t-Sh
arin
g Po
rtio
n) –
The
am
ount
the
gove
rnm
ent p
ays
to th
e PD
P Sp
onso
r fo
r ad
ditio
nal b
enef
its p
rovi
ded
to lo
w-in
com
e en
rolle
es. T
he
addi
tiona
l ben
efits
may
incl
ude
paym
ent f
or s
ome
or a
ll of
the
dedu
ctib
le, t
he c
oins
uran
ce, a
nd th
e co
-pay
men
t abo
ve th
e ou
t-of-
pock
et th
resh
old.
The
se p
aym
ents
are
ac
coun
ted
for a
s pay
men
ts m
ade
unde
r a se
lf-in
sure
d pl
an.
Low
-Inc
ome
Subs
idy
(Pre
miu
m P
ortio
n) –
The
am
ount
the
gove
rnm
ent p
ays
to th
e PD
P Sp
onso
r fo
r lo
w-in
com
e en
rolle
es in
lieu
of
part
or a
ll of
the
Ben
efic
iary
Pr
emiu
m (S
tand
ard
Cov
erag
e Po
rtion
). Th
ese
paym
ents
are
acc
ount
ed fo
r as h
ealth
pre
miu
m.
Part
D P
aym
ent
Dem
onst
ratio
n –
A p
aym
ent
from
the
gov
ernm
ent
to a
PD
P Sp
onso
r pa
rtici
patin
g in
CM
S’s
Part
D P
aym
ent
Dem
onst
ratio
n. T
he P
aym
ent
Dem
onst
ratio
n is
a s
peci
al a
rran
gem
ent
in w
hich
the
PD
P sp
onso
r re
ceiv
es a
pre
dete
rmin
ed p
re-e
nrol
lee
capi
tatio
n pa
ymen
t an
d th
e go
vern
men
t no
long
er p
rovi
des
rein
sura
nce
for t
he 8
0 pe
rcen
t of c
osts
in e
xces
s of
the
out-o
f-po
cket
thre
shol
d. R
athe
r, th
e PD
P sp
onso
r ass
umes
the
risk
for t
his
80 p
erce
nt o
f cos
ts, i
n ad
ditio
n to
its
norm
al 1
5 pe
rcen
t sha
re o
f co
sts
in e
xces
s of
this
thre
shol
d. H
owev
er, r
isk
corr
idor
pro
tect
ion
does
stil
l app
ly to
this
80
perc
ent s
hare
of
cost
s. Th
ese
paym
ents
are
ac
coun
ted
for a
s hea
lth p
rem
ium
.
PDP
Spon
sor
– Th
e en
tity
that
pro
vide
s sta
nd-a
lone
Par
t D c
over
age
(as o
ppos
ed to
Par
t D c
over
age
prov
ided
thro
ugh
a M
edic
are
Adv
anta
ge p
lan)
.
Rei
nsur
ance
Cov
erag
e –
The
Med
icar
e Pa
rt D
pro
visi
on u
nder
whi
ch th
e PD
P sp
onso
r may
rece
ive
a R
eins
uran
ce P
aym
ent.
This
doe
s no
t inc
lude
pay
men
ts u
nder
the
Part
D P
aym
ent D
emon
stra
tion.
© 1
998-
2017
Nat
iona
l Ass
ocia
tion
of In
sura
nce
Com
mis
sion
ers
45
10/2
0/20
17
Rei
nsur
ance
Pay
men
t – A
n am
ount
pai
d by
the
gove
rnm
ent f
or b
enef
it co
sts a
bove
the
out-o
f-po
cket
thre
shol
d (s
ee “
Stan
dard
Cov
erag
e”).
Gen
eral
ly, w
hen
cost
s exc
eed
the
out-o
f-po
cket
thre
shol
d, th
e go
vern
men
t pay
s 80
per
cent
of t
he c
osts
, the
enr
olle
e pa
ys 5
per
cent
(or s
peci
fied
co-p
aym
ents
, if g
reat
er),
and
the
PDP
Spon
sor p
ays
the
rem
aind
er (t
ypic
ally
, 15
perc
ent o
f the
cos
ts).
The
amou
nt p
aid
by th
e go
vern
men
t is t
reat
ed a
s a c
laim
pay
men
t mad
e by
a se
lf-in
sure
d be
nefit
pla
n ra
ther
than
as r
even
ue
to th
e PD
P Sp
onso
r, an
d th
e cl
aim
s do
not
flow
thro
ugh
the
PDP
spon
sor’
s in
com
e st
atem
ent.
In c
ases
whe
re th
e go
vern
men
t pre
pays
the
Rei
nsur
ance
Pay
men
t on
an
estim
ated
bas
is, t
he p
repa
ymen
t is t
reat
ed a
s a d
epos
it, w
hich
aga
in d
oes n
ot p
ass t
hrou
gh th
e PD
P Sp
onso
r’s i
ncom
e st
atem
ent.
Ris
k C
orri
dor
Paym
ent A
djus
tmen
t – A
n am
ount
, by
whi
ch th
e go
vern
men
t adj
usts
its
paym
ents
to th
e PD
P Sp
onso
r, ba
sed
on h
ow a
ctua
l ben
efit
cost
s va
ry fr
om th
e co
sts
antic
ipat
ed in
the
PDP
Spon
sor’
s bi
d fo
r th
e Pa
rt D
con
tract
(th
e “t
arge
t am
ount
” of
cos
ts).
The
gove
rnm
ent e
stab
lishe
d th
resh
olds
for
sym
met
ric r
isk
corr
idor
s ar
ound
the
targ
et a
mou
nts,
usin
g pe
rcen
tage
s of
the
targ
et a
mou
nt. I
f ac
tual
cos
ts e
xcee
d th
e ta
rget
am
ount
but
are
less
than
the
first
thre
shol
d up
per
limit,
the
n no
ad
just
men
t is
mad
e. If
act
ual c
osts
exc
eed
the
first
thre
shol
d up
per l
imit,
the
gove
rnm
ent w
ill m
ake
an a
dditi
onal
pay
men
t equ
al to
50
perc
ent (
75 p
erce
nt in
200
6 an
d 20
07, o
r 90
perc
ent u
nder
som
e ci
rcum
stan
ces)
of t
he e
xces
s th
at fa
lls b
etw
een
the
first
and
seco
nd th
resh
olds
are
2.5
per
cent
and
5 p
erce
nt, r
espe
ctiv
ely:
for 2
008-
2011
, th
ey a
re 5
per
cent
and
10
perc
ent:
and
for
2012
and
late
r, th
e th
resh
olds
hav
e no
t yet
bee
n es
tabl
ishe
d, b
ut w
ill b
e no
less
than
the
2008
-201
1 va
lues
. Ris
k co
rrid
or
paym
ent a
djus
tmen
ts a
re a
ccou
nted
for a
s ret
rosp
ectiv
e pr
emiu
m a
djus
tmen
ts o
n re
trosp
ectiv
ely
rate
d co
ntra
cts.
Ris
k C
orri
dor
Prot
ectio
n –
The
Med
icar
e Pa
rt D
pro
visi
on u
nder
whi
ch th
e PD
P sp
onso
r may
rece
ive
or p
ay a
Ris
k C
orrid
or P
aym
ent A
djus
tmen
t. M
ost e
mpl
oyer
pla
ns
prov
idin
g M
edic
are
Part
D a
re n
ot su
bjec
t to
Ris
k C
orrid
or P
aym
ent A
djus
tmen
ts.
Stan
dard
Cov
erag
e –
The
Part
D b
enef
it de
sign
that
con
form
s to
cer
tain
sta
ndar
ds p
resc
ribed
by
the
gove
rnm
ent.
The
stan
dard
cov
erag
e co
mpr
ises
: no
cove
rage
for a
n an
nual
initi
al d
educ
tible
; cov
erag
e ne
t of a
coi
nsur
ance
pro
visi
on (2
5 pe
rcen
t of c
osts
are
pay
able
by
the
insu
red)
for c
osts
up
to a
n in
itial
cov
erag
e lim
it; a
rang
e be
yond
th
e in
itial
cov
erag
e lim
it, in
whi
ch th
e in
sure
d pa
ys a
ll of
the
pres
crip
tion
drug
cos
ts –
i.e.
, no
cove
rage
by
the
PDP;
and
an
annu
al o
ut-o
f-po
cket
thre
shol
d, a
bove
whi
ch
the
insu
red
pays
the
grea
ter o
f a s
peci
fied
co-p
aym
ent o
r 5 p
erce
nt o
f the
dru
g co
st. T
he v
ario
us li
mits
and
thre
shol
ds a
re s
et a
t spe
cifie
d do
llar a
mou
nts
for 2
006,
whi
ch
will
be
incr
ease
d in
late
r yea
rs b
ased
on
the
grow
th in
dru
g ex
pend
iture
s. W
here
ver t
he te
rm “
Stan
dard
Cov
erag
e” is
use
d as
par
t of t
hese
inst
ruct
ions
, the
sam
e tre
atm
ent
wou
ld b
e ap
plie
d to
cov
erag
e th
at h
as b
een
appr
oved
as
actu
aria
lly e
quiv
alen
t cov
erag
e. W
ith re
spec
t to
amou
nts
abov
e th
e ou
t-of-
pock
et th
resh
old,
see
the
defin
ition
s of
“R
eins
uran
ce P
aym
ent”
and
Par
t D P
aym
ent D
emon
stra
tion.
”
Supp
lem
enta
l B
enef
its –
Ben
efits
in
exce
ss o
f th
e St
anda
rd C
over
age.
The
se b
enef
its t
ypic
ally
will
cov
er s
ome
porti
on o
f th
e de
duct
ible
, the
co-
paym
ents
, or
the
“cov
erag
e ga
p” b
etw
een
the
initi
al c
over
age
limit
and
the
out-o
f-po
cket
thre
shol
d. S
uppl
emen
tal B
enef
its a
re p
art o
f an
enro
llee’
s Pa
rt D
cov
erag
e, so
they
are
not
pla
ced
in th
e “O
ther
” ca
tego
ry in
the
RB
C fo
rmul
a. H
owev
er th
ey a
re n
ot s
ubje
ct to
eith
er th
e R
eins
uran
ce P
aym
ent o
r the
Ris
k C
orrid
or P
aym
ent A
djus
tmen
t, so
they
rece
ive
less
favo
rabl
e R
BC
trea
tmen
t tha
n th
e St
anda
rd C
over
age.
Con
fiden
tial w
hen
Com
plet
ed
Aff
ix B
ar C
ode
Her
e
CO
MPA
NY
INFO
RM
AT
ION
PA
GE
(JU
RA
T)
Hea
lth R
isk-
Bas
ed C
apita
lFo
r th
e Y
ear
End
ing
Dec
embe
r 31
, 201
7
(A)
Com
pany
Nam
e __
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
_
(B)
NA
IC G
roup
___
____
____
____
_(C
)N
AIC
Com
pany
Cod
e __
____
____
____
__(D
)Em
ploy
er's
ID N
umbe
r ___
____
____
____
____
____
____
__
(E)
Org
aniz
ed u
nder
the
Law
s of t
he S
tate
of _
____
____
____
____
____
Con
tact
Per
son
for H
ealth
Ris
k-B
ased
Cap
ital:
(F)
Firs
t Nam
e(G
)M
iddl
e(H
)La
st N
ame
(I)
Mai
l Add
ress
of C
onta
ct P
erso
n(S
treet
and
Num
ber o
r P.O
. Box
)
(J)
City
(K
)St
ate
(L)
Zip
(M)
Phon
e N
umbe
rEx
tens
ion
(N)
Emai
l Add
ress
of R
BC
Con
tact
Per
son
(O)
Dat
e Pr
epar
ed _
____
____
____
____
_
(P)
Prep
arer
(if d
iffer
ent t
han
Con
tact
)Fi
rst
Mid
dle
Last
(Q)
Is th
is a
n O
rigin
al, A
men
ded,
or R
efili
ng?
(O, A
, R)
___
____
___
(Q1)
If A
men
ded,
Am
endm
ent N
umbe
r:
(R)
Wer
e an
y ite
ms t
hat c
ome
dire
ctly
from
the
annu
al st
atem
ent e
nter
ed m
anua
lly
to p
repa
re th
is fi
ling?
(Yes
/No)
(S)
Was
the
entit
y in
bus
ines
s for
the
entir
e re
porti
ng y
ear?
Off
icer
s:
Nam
e
Title
Each
says
that
they
are
the
abov
e de
scrib
ed o
ffic
ers o
f the
said
insu
rer,
and
that
this
risk
-bas
ed c
apita
l rep
ort i
s a tr
ue a
nd fa
ir re
pres
enta
tion
of th
e co
mpa
ny's
affa
irs a
nd h
as b
een
com
plet
ed in
acc
orda
nce
with
the
NA
IC in
stru
ctio
ns, a
ccor
ding
to th
e be
st o
f the
ir in
form
atio
n, k
now
ledg
e an
d be
lief,
resp
ectiv
ely.
_
____
____
____
____
____
____
____
____
_
_
____
____
____
____
____
____
____
____
_
__
____
____
____
____
____
____
____
__
(Sig
natu
re)
(Sig
natu
re)
(Sig
natu
re)
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
XR
001
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
AFF
ILIA
TE
D C
OM
PAN
IES
RIS
K -
DE
TA
ILS
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
Nam
e of
Aff
iliat
e
Aff
il Ty
pe
Cod
e
NA
IC
Com
pany
C
ode
or
Alie
n ID
N
umbe
r
Aff
iliat
e's R
BC
aft
er
Cov
aria
nce
Bef
ore
Bas
ic O
pera
tiona
l R
isk
XR
025
Line
(37)
PR03
2 L
ine
(73)
LR03
1 Li
ne (6
7) +
(70)
Boo
k/A
dj
Car
ryin
g V
alue
of
Aff
iliat
e's
Com
mon
St
ock
Val
uatio
n B
asis
of
Col
(5)
F
- Fai
r
A -
All
Oth
er
Tota
l Val
ue
of A
ffili
ate's
O
utst
andi
ng
Com
mon
St
ock
Tota
l St
atut
ory
Surp
lus o
f A
ffili
ate
Subj
ect t
o R
BC
Boo
k/A
dj
Car
ryin
g V
alue
of
Aff
iliat
e's
Pref
erre
d St
ock
Tota
l Val
ue
of A
ffili
ate's
O
utst
andi
ng
Pref
erre
d St
ock
Perc
ent
Ow
ned
(Col
s 5 +
9) /
(C
ols 7
+ 1
0)
H0
Com
pone
nt
RB
C
Req
uire
d
H1
Com
pone
nt
RB
C
Req
uire
d(0
1)(0
2)(0
3)(0
4)(0
5)(0
6)(0
7)(0
8)(0
9)(1
0)(1
1)(1
2)(1
3)(1
4)(1
5)(1
6)(9
9999
99)
Tota
lX
XX
XX
XX
XX
XX
X
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
Log
icIf
Col
(2) <
5 a
nd C
ol (6
) = F
Do
Cal
cula
tion
Cal
cula
tion
Col
(12)
= M
in [C
ol (4
) x C
ol (1
1), C
ol (8
) x C
ol (1
1)]
If C
ol (5
) + C
ol (9
) > M
ax [C
ol (4
) x C
ol (1
1), C
ol (8
) x C
ol (1
1)]
then
Col
(13)
= M
ax{[
Col
(5) +
Col
(9) -
Col
(8) x
Col
(11)
] x .2
25, [
Col
(4) -
Col
(8)]
x C
ol (1
1)}
If C
ol (4
) x C
ol (1
1) >
Col
(5) +
Col
(9) >
Col
(8) x
Col
(11)
the
nC
ol (1
3) =
Col
(5) +
Col
(9) -
Col
(8) x
Col
(11)
Oth
erw
ise
Col
(13)
= 0
Col
(12)
and
(13)
can
not b
e le
ss th
an 0
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002
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
AFF
ILIA
TE
D C
OM
PAN
IES
RIS
K(1
)(2
)Ty
pe o
f Aff
iliat
eTy
pe C
ode
Bas
isR
BC
Cou
n t(1
)D
irect
ly O
wne
d In
sure
r Sub
ject
to R
BC
1A
ffili
ate's
RB
C*
(2)
Indi
rect
ly O
wne
d In
sure
r Sub
ject
to R
BC
2A
ffili
ate's
RB
C*
(3)
Dire
ctly
Ow
ned
Hea
lth E
ntity
Sub
ject
to R
BC
3A
ffili
ate's
RB
C*
(4)
Indi
rect
ly O
wne
d H
ealth
Ent
ity S
ubje
ct to
RB
C4
Aff
iliat
e's R
BC
*(5
)In
vest
men
t Aff
iliat
es5
0.30
0(6
)H
oldi
ng C
ompa
ny E
xces
s of S
ubsi
diar
ies
60.
300
(7)
Dire
ctly
Ow
ned
Alie
n In
sure
r7
1.00
0(8
)In
dire
ctly
Ow
ned
Alie
n In
sure
rs8
1.00
0(9
)In
vest
men
t in
Pare
nt9
0.30
0(1
0)O
ther
Aff
iliat
es10
0.30
0(1
1)Fa
ir V
alue
Exc
ess A
ffili
ate
Com
mon
Sto
ck11
Tota
l of T
ype
Cod
es 1
th
roug
h 4
of X
R00
2, C
ol 1
3*
Cap
ped
at c
arry
ing
valu
e on
the
pare
nt's
stat
emen
t
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e. XR
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© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
CR
OSS
CH
EC
KIN
G F
OR
AFF
ILIA
TE
D IN
VE
STM
EN
TS
Sche
dule
D, P
art 6
, Sec
tion
1Pr
efer
red
Stoc
kA
nnua
l(1
)(2
)(3
)St
atem
ent
Ann
ual S
tmt
Tota
lLi
ne N
umbe
rTo
tal P
refe
rred
From
RB
CSt
ock
Rep
ort
Diff
eren
ce(1
)Pa
rent
0199
999
(2)
U.S
. P&
C In
sure
rs02
9999
9X
XX
XX
X(3
)U
.S. L
ife In
sure
rs03
9999
9X
XX
XX
X(4
)U
.S. H
ealth
Ent
ity04
9999
9X
XX
XX
X(5
)To
tal P
&C
, Life
and
Hea
lth In
sure
rs-
-
-
(6)
Alie
n In
sure
r05
9999
9(7
)N
on-I
nsur
er W
hich
con
trols
Insu
rers
0699
999
(8)
Inve
stm
ent A
ffili
ates
0799
999
(9)
Oth
er A
ffili
ates
0899
999
(10)
Subt
otal
0999
999
Com
mon
Sto
ckA
nnua
l(1
)(2
)(3
)St
atem
ent
Ann
ual S
tmt
Tota
lLi
ne N
umbe
rTo
tal C
omm
onFr
om R
BC
Stoc
kR
epor
tD
iffer
ence
(11)
Pare
nt10
9999
9(1
2)U
.S. P
&C
Insu
rers
1199
999
XX
XX
XX
(13)
U.S
. Life
Insu
rers
1299
999
XX
XX
XX
(14)
U.S
. Hea
lth E
ntity
1399
999
XX
XX
XX
(15)
Tota
l P&
C, L
ife a
nd H
ealth
Insu
rers
-
-
-
(1
6)A
lien
Insu
rer
1499
999
(17)
Non
-Ins
urer
Whi
ch C
ontro
ls In
sure
rs15
9999
9(1
8)In
vest
men
t Aff
iliat
es16
9999
9(1
9)O
ther
Aff
iliat
es17
9999
9(2
0)Su
btot
al18
9999
9-
-
-
XR
004
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
(1)
(2)
(3)
(4)
Ann
ual S
tate
men
t Sou
rce
Bk/
Adj
Car
ryin
g V
alue
Fact
orR
BC
Req
uire
men
tY
es/N
o R
espo
nse
Non
-Con
trol
led
Ass
ets
(1)
Loan
ed to
Oth
ers -
Con
form
ing
Secu
ritie
s Len
ding
Pro
gram
sG
ener
al In
terr
ogat
orie
s Par
t 1 L
ine
24.0
50.
002
(2)
Loan
ed to
Oth
ers -
Sec
uriti
es L
endi
ng P
rogr
ams -
Oth
erG
ener
al In
terr
ogat
orie
s Par
t 1 L
ine
24.0
60.
010
(3)
Subj
ect t
o R
epur
chas
e A
gree
men
tsG
ener
al In
terr
ogat
orie
s Par
t 1 L
ine
25.2
10.
010
(4)
Subj
ect t
o R
ever
se R
epur
chas
e A
gree
men
tsG
ener
al In
terr
ogat
orie
s Par
t 1 L
ine
25.2
20.
010
(5)
Subj
ect t
o D
olla
r Rep
urch
ase
Agr
eem
ents
Gen
eral
Inte
rrog
ator
ies P
art 1
Lin
e 25
.23
0.01
0(6
)Su
bjec
t to
Rev
erse
Dol
lar R
epur
chas
e A
gree
men
tsG
ener
al In
terr
ogat
orie
s Par
t 1 L
ine
25.2
40.
010
(7)
Plac
ed U
nder
Opt
ion
Agr
eem
ents
Gen
eral
Inte
rrog
ator
ies P
art 1
Lin
e 25
.25
0.01
0(8
)Le
tter S
tock
or S
ecur
ities
Res
trict
ed a
s to
Sale
- Ex
clud
ing
FHLB
Cap
ital S
tock
Gen
eral
Inte
rrog
ator
ies P
art 1
Lin
e 25
.26
0.01
0(9
)FH
LB C
apita
l Sto
ckG
ener
al In
terr
ogat
orie
s Par
t 1 L
ine
25.2
70.
010
(10)
On
Dep
osit
with
Sta
tes
Gen
eral
Inte
rrog
ator
ies P
art 1
Lin
e 25
.28
0.01
0(1
1)O
n D
epos
it w
ith O
ther
Reg
ulat
ory
Bod
ies
Gen
eral
Inte
rrog
ator
ies P
art 1
Lin
e 25
.29
0.01
0(1
2)Pl
edge
d as
Col
late
ral -
Exc
ludi
ng C
olla
tera
l Ple
dged
to a
n FH
LBG
ener
al In
terr
ogat
orie
s Par
t 1 L
ine
25.3
00.
010
(13)
Pled
ged
as C
olla
tera
l to
FHLB
(inc
ludi
ng a
sset
s bac
king
fund
ing
agre
emen
ts)
Gen
eral
Inte
rrog
ator
ies P
art 1
Lin
e 25
.31
0.01
0(1
4)O
ther
Gen
eral
Inte
rrog
ator
ies P
art 1
Lin
e 25
.32
0.01
0(1
5)To
tal N
on-C
ontro
lled
Ass
ets
Sum
of L
ines
(1) t
hrou
gh (1
4)
(16)
Gua
rant
ees f
or A
ffili
ates
Not
es to
Fin
anci
al S
tate
men
ts 1
4A(0
3C1)
, Col
umn
20.
010
(17)
Con
tinge
nt L
iabi
litie
sN
otes
to F
inan
cial
Sta
tem
ents
14A
(1),
Col
umn
20.
010
(18)
Is th
e en
tity
resp
onsi
ble
for f
iling
the
U.S
. Fed
eral
inco
me
"Yes
", "
No"
or "
N/A
" in
Col
umn
(4)
tax
retu
rn fo
r the
repo
rting
insu
rer a
regu
late
d in
sura
nce
com
pany
?(1
9)SS
AP
No.
101
Par
agra
ph 1
1a D
efer
red
Tax
Ass
ets
Not
es to
Fin
anci
al S
tate
men
ts, I
tem
9A
2(a)
, Col
umn
3†
(20)
SSA
P N
o. 1
01 P
arag
raph
11b
Def
erre
d Ta
x A
sset
sN
otes
to F
inan
cial
Sta
tem
ents
, Ite
m 9
A2(
b), C
olum
n 3
0.01
0
(21)
Tota
l Mis
cella
neou
s Off
-Bal
ance
She
et a
nd O
ther
Item
sL(
15) +
L(1
6) +
L(1
7) +
L(1
9) +
L(2
0)
†If
Lin
e (1
8) C
olum
n (4
) is "
Yes
", th
en th
e fa
ctor
is 0
.005
. If L
ine
(18)
Col
umn
(4) i
s "N
o", t
hen
the
fact
or is
0.0
10. I
f Lin
e (1
8) C
olum
n (4
) is "
N/A
", th
en th
e fa
ctor
is 0
.000
.
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
OFF
-BA
LA
NC
E S
HE
ET
AN
D O
TH
ER
ITE
MS
XR
005
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed (1)
(2)
(3)
(4)
Ass
et C
ateg
ory
Ann
ual S
tate
men
t Sou
rce
Off
-Bal
ance
She
et
Col
late
ral
Boo
k/A
djus
ted
Car
ryin
g V
alue
Sche
dule
DL,
Par
t 1
Boo
k/A
djus
ted
Car
ryin
g V
alue
Subt
otal
Fact
orR
BC
Req
uire
men
tFi
xed
Inco
me
Ass
ets
Bon
ds(1
)N
AIC
01
- U.S
. Gov
ernm
ent -
Dire
ct a
nd G
uara
ntee
dC
ompa
ny R
ecor
ds0.
000
(2)
Oth
er N
AIC
01
Bon
dsC
ompa
ny R
ecor
ds0.
003
(3)
Tota
l NA
IC 0
1 B
onds
Line
(1) +
Lin
e (2
)
(4)
Tota
l NA
IC 0
2 B
onds
Com
pany
Rec
ords
0.01
0(5
)To
tal N
AIC
03
Bon
dsC
ompa
ny R
ecor
ds0.
020
(6)
Tota
l NA
IC 0
4 B
onds
Com
pany
Rec
ords
0.04
5(7
)To
tal N
AIC
05
Bon
dsC
ompa
ny R
ecor
ds0.
100
(8)
Tota
l NA
IC 0
6 B
onds
Com
pany
Rec
ords
0.30
0(9
)To
tal B
onds
L(3)
+L(4
)+L(
5)+L
(6)+
L(7)
+L(8
)
Equi
ty A
sset
sPr
efer
red
Stoc
k - U
naff
iliat
ed(1
0)N
AIC
01
Una
ffili
ated
Pre
ferr
ed S
tock
Com
pany
Rec
ords
0.00
3(1
1)N
AIC
02
Una
ffili
ated
Pre
ferr
ed S
tock
Com
pany
Rec
ords
0.01
0(1
2)N
AIC
03
Una
ffili
ated
Pre
ferr
ed S
tock
Com
pany
Rec
ords
0.02
0(1
3)N
AIC
04
Una
ffili
ated
Pre
ferr
ed S
tock
Com
pany
Rec
ords
0.04
5(1
4)N
AIC
05
Una
ffili
ated
Pre
ferr
ed S
tock
Com
pany
Rec
ords
0.10
0(1
5)N
AIC
06
Una
ffili
ated
Pre
ferr
ed S
tock
Com
pany
Rec
ords
0.30
0(1
6)To
tal U
naff
iliat
ed P
refe
rred
Sto
ckSu
m o
f Lin
es (1
0) th
roug
h (1
5)
(17)
Com
mon
Sto
ckC
ompa
ny R
ecor
ds0.
150
(18)
Rea
l Est
ate
and
Prop
erty
& E
quip
men
t Ass
ets
Com
pany
Rec
ords
0.10
0
(19)
Oth
er In
vest
ed A
sset
sC
ompa
ny R
ecor
ds0.
200
(20)
Mor
tgag
e Lo
ans o
n R
eal E
stat
eC
ompa
ny R
ecor
ds0.
050
(21)
Cas
h, C
ash
Equi
vale
nts a
nd S
hort-
Term
Inve
stm
ents
Com
pany
Rec
ords
0.00
3(N
ot re
porte
d on
Bon
ds a
bove
)
(22)
Tota
lL(
9)+L
(16)
+L(1
7)+L
(18)
+L(1
9)+L
(20)
+L(2
1)
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
the
filin
g so
ftwar
e.
OFF
-BA
LA
NC
E S
HE
ET
SE
CU
RIT
Y L
EN
DIN
G C
OL
LA
TE
RA
L A
ND
SC
HE
DU
LE
DL
, PA
RT
1 A
SSE
TS
XR
006
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
FIX
ED
INC
OM
E A
SSE
TS
(1)
(2)
Ann
ual S
tate
men
t Sou
rce
Bk/
Adj
Car
ryin
g V
alue
Fact
orR
BC
Req
uire
men
tB
ON
DS
(1)
NA
IC 0
1 - U
.S. G
over
nmen
t - D
irect
and
Gua
rant
eed
Sch
D, P
t 1A
, Sn
1, C
ol 7
, Lin
e 1.
1 (2
)To
tal N
AIC
01
Bon
dsSc
h D
, Pt 1
A, S
n 1,
Col
7, L
ine
10.1
- Li
ne 7
.1(3
)O
ther
NA
IC 0
1 B
onds
L(2)
- L(
1)0.
0030
(4)
Tota
l NA
IC 0
2 B
onds
Sch
D, P
t 1A
, Sn
1, C
ol 7
, Lin
e 10
.2 -
Line
7.2
0.01
00(5
)To
tal N
AIC
03
Bon
dsSc
h D
, Pt 1
A, S
n 1,
Col
7, L
ine
10.3
- Li
ne 7
.30.
0200
(6)
Tota
l NA
IC 0
4 B
onds
Sch
D, P
t 1A
, Sn
1, C
ol 7
, Lin
e 10
.4 -
Line
7.4
0.04
50(7
)To
tal N
AIC
05
Bon
dsSc
h D
, Pt 1
A, S
n 1,
Col
7, L
ine
10.5
- Li
ne 7
.5
0.10
00(8
)To
tal N
AIC
06
Bon
dsSc
h D
, Pt 1
A, S
n 1,
Col
7, L
ine
10.6
- Li
ne 7
.60.
3000
(9)
Tot
al B
onds
MIS
CE
LL
AN
EO
US
FIX
ED
INC
OM
E A
SSE
TS
(10)
Cas
hPa
ge 2
, Lin
e 5,
insi
de a
mou
nt 1
0.00
30(1
1)C
ash
Equi
vale
nts
Page
2, L
ine
5, in
side
am
ount
2(1
2)Le
ss:
Cas
h Eq
uiva
lent
, Bon
ds in
clud
ed in
Sch
edul
e D
, Par
t 1A
Sch
E Pt
2, C
7, L
8399
999,
in p
art
(13)
Les
s: E
xem
pt M
oney
Mar
ket M
utua
l Fun
ds*
Sch
E P
t 2, C
7, L
8599
999
(14)
Net
Cas
h Eq
uiva
lent
sL
(11)
- L
(12)
- L
(13)
0.00
30(1
5)Sh
ort-T
erm
Inve
stm
ents
Page
2, L
ine
5, in
side
am
ount
3(1
6)Sh
ort-T
erm
Bon
ds *
Sch
DA
, Pt 1
, Col
7, L
8399
999
(17)
Tota
l Oth
er S
hort-
Term
Inve
stm
ents
L
(15)
- L
(16)
0.00
30(1
8)M
ortg
age
Loan
s - F
irst L
iens
Page
2, C
ol 3
, Lin
e 3.
10.
0500
(19)
Mor
tgag
e Lo
ans -
Oth
er T
han
Firs
t Lie
nsPa
ge 2
, Col
3, L
ine
3.2
0.05
00(2
0)R
ecei
vabl
e fo
r Sec
uriti
esPa
ge 2
, Col
3, L
ine
90.
0240
(21)
Agg
rega
te w
rite-
ins f
or in
vest
ed a
sset
sPa
ge 2
, Col
3, L
ine
110.
0500
(22)
Col
late
ral L
oans
Incl
uded
in P
age
2, C
ol 3
, Lin
e 8
0.05
00(2
3)N
AIC
01
Wor
king
Cap
ital F
inan
ce In
vest
men
tsN
otes
to F
inan
cial
Sta
tem
ent 5
M(0
1a),
Col
. 30.
0038
(24)
NA
IC 0
2 W
orki
ng C
apita
l Fin
ance
Inve
stm
ents
Not
es to
Fin
anci
al S
tate
men
t 5M
(01b
), C
ol. 3
0.01
25(2
5)O
ther
Lon
g-Te
rm In
vest
ed A
sset
s Exc
ludi
ng C
olla
tera
l Loa
ns a
nd
Wor
king
Cap
ital F
inan
ce In
vest
men
tsIn
clud
ed in
Pag
e 2,
Col
3, L
ine
80.
2000
(26)
Fede
ral G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
tsSc
hedu
le B
A P
art 1
, Col
umn
12 L
ines
319
9999
+ 3
2999
990.
0014
(27)
Fede
ral N
on-G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
tsSc
hedu
le B
A P
art 1
, Col
umn
12 L
ines
339
9999
+ 3
4999
990.
0260
(28)
Stat
e G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
tsSc
hedu
le B
A P
art 1
, Col
umn
12 L
ines
359
9999
+ 3
6999
990.
0014
(29)
Stat
e N
on-G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
tsSc
hedu
le B
A P
art 1
, Col
umn
12 L
ines
379
9999
+ 3
8999
990.
0260
(30)
All
Oth
er L
ow In
com
e H
ousi
ng T
ax C
redi
tsSc
hedu
le B
A P
art 1
, Col
umn
12 L
ines
399
9999
+ 4
0999
990.
0150
(31)
Tota
l Oth
er L
ong-
Term
Inve
sted
Ass
ets (
Page
2, C
ol 3
, Lin
e 8)
L(2
2)+L
(23)
+L(2
4)+L
(25)
+L(2
6)+L
(27)
+L(2
8)+L
(29)
+L
(30)
(32)
Der
ivat
ives
Page
2, C
ol 3
, Lin
e 7
0.05
00
L(9)
+L(1
0)+L
(14)
+L(1
7)+L
(18)
+L(1
9)+L
(20)
(33)
Tota
l Fix
ed In
com
e A
sset
s RB
C+L
(21)
+L(3
1)+L
(32)
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.*
The
se b
onds
app
ear i
n Sc
hedu
le D
Par
t 1A
Sec
tion
1 an
d ar
e al
read
y re
cogn
ized
in th
e B
ond
porti
on o
f the
form
ula.
XR
007
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
RE
PLIC
AT
ION
(SY
NT
HE
TIC
ASS
ET
) TR
AN
SAC
TIO
NS
AN
D M
AN
DA
TO
RY
CO
NV
ER
TIB
LE
SE
CU
RIT
IES
(1)
(2)
(3)
(4)
(5)
(6)
(7)
NA
IC D
esig
natio
nor
Oth
erV
alue
of
RB
CR
SAT
Num
ber
Type
CU
SIP
Des
crip
tion
of A
sset
(s)
Des
crip
tion
of A
sset
Ass
etR
equi
rem
ent
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31)
(32)
(33)
(34)
(35)
(999
9999
)X
XX
XX
XX
XX
Tota
lX
XX
Den
otes
item
s tha
t mus
t be
man
ually
ent
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filin
g so
ftwar
e.
XR
008
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
EQ
UIT
Y A
SSE
TS
(1)
(2)
Ann
ual S
tate
men
t Sou
rce
Bk/
Adj
Car
ryin
g V
alue
Fa
ctor
RB
C R
equi
rem
ent
PRE
FER
RE
D S
TO
CK
- U
NA
FFIL
IAT
ED
(1)
NA
IC 0
1 Pr
efer
red
Stoc
k In
clud
ed in
Sch
D, P
t 2, S
n 1
0.00
3(2
)N
AIC
02
Pref
erre
d St
ock
Incl
uded
in S
ch D
, Pt 2
, Sn
10.
010
(3)
NA
IC 0
3 Pr
efer
red
Stoc
k In
clud
ed in
Sch
D, P
t 2, S
n 1
0.02
0(4
)N
AIC
04
Pref
erre
d St
ock
Incl
uded
in S
ch D
, Pt 2
, Sn
10.
045
(5)
NA
IC 0
5 Pr
efer
red
Stoc
k In
clud
ed in
Sch
D, P
t 2, S
n 1
0.10
0(6
)N
AIC
06
Pref
erre
d St
ock
Incl
uded
in S
ch D
, Pt 2
, Sn
10.
300
(7)
Subt
otal
- U
naff
iliat
ed P
refe
rred
Sto
c kSu
m o
f Lin
es (1
) thr
ough
(6)
(8)
NA
IC 0
1 H
ybrid
Sec
uriti
esSc
h D
, Pt 1
A, S
n 1,
Col
7, L
ine
7.1
0.00
3(9
)N
AIC
02
Hyb
rid S
ecur
ities
Sch
D, P
t 1A
, Sn
1, C
ol 7
, Lin
e 7.
20.
010
(10)
NA
IC 0
3 H
ybrid
Sec
uriti
esSc
h D
, Pt 1
A, S
n 1,
Col
7, L
ine
7.3
0.02
0(1
1)N
AIC
04
Hyb
rid S
ecur
ities
Sch
D, P
t 1A
, Sn
1, C
ol 7
, Lin
e 7.
40.
045
(12)
NA
IC 0
5 H
ybrid
Sec
uriti
esSc
h D
, Pt 1
A, S
n 1,
Col
7, L
ine
7.5
0.10
0(1
3)N
AIC
06
Hyb
rid S
ecur
ities
Sch
D, P
t 1A
, Sn
1, C
ol 7
, Lin
e 7.
60.
300
(14)
Subt
otal
- H
ybrid
Sec
uriti
e sSu
m o
f Lin
es (8
) thr
ough
(13)
(15)
Tota
l Una
ffili
ated
Pre
ferr
ed S
tock
and
Hyb
rids
Line
(7) +
Lin
e (1
4)
CO
MM
ON
ST
OC
K -
UN
AFF
ILIA
TE
D(1
6)Fe
dera
l Hom
e Lo
an B
ank
Stoc
kC
ompa
ny R
ecor
ds0.
023
(17)
Non
-Gov
ernm
ent M
oney
Mar
ket F
unds
Sche
dule
E, P
art 2
, Col
umn
7, L
ine
8699
999
0.00
0(1
8)To
tal C
omm
on S
tock
Sch
D, S
umm
ary,
Col
1, L
ine
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9)A
ffili
ated
Com
mon
Sto
ckSc
h D
, Sum
mar
y, C
ol 1
, Lin
e 24
(20)
Oth
er U
naff
iliat
ed C
omm
on S
tock
L(18
)-L(
16)-
L(17
)-L(
19)
$00.
150
(21)
Tota
l Una
ffili
ated
Com
mon
Sto
ckL(
16)+
L(17
)+L(
20)
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otes
item
s tha
t mus
t be
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ually
ent
ered
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filin
g so
ftwar
e.
(Sho
uld
equa
l Pag
e 2,
Col
3, L
ine
2.1
less
Sch
D S
um, C
ol 1
, L18
)
HY
BR
ID S
EC
UR
ITIE
S - U
NA
FFIL
IAT
ED
XR
009
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
PRO
PER
TY
& E
QU
IPM
EN
T A
SSE
TS
(1)
(2)
Ann
ual S
tate
men
t Sou
rce
Bk/
Adj
Car
ryin
g V
alue
Fact
orR
BC
Req
uire
men
t
(1)
Prop
ertie
s Occ
upie
d by
the
Com
pany
Pa
ge 2
, Col
3, L
ine
4.1
0.10
0(2
)En
cum
bran
ces (
Prop
erty
Occ
upie
d by
the
Com
pany
) Pa
ge 2
, Lin
e 4.
1, in
side
am
ount
0.
100
(3)
Prop
ertie
s Hel
d fo
r the
Pro
duct
ion
of In
com
e Pa
ge 2
, Col
3, L
ine
4.2
0.10
0(4
)En
cum
bran
ces (
Prop
erty
Hel
d fo
r Pro
duct
ion
of In
com
e)
Page
2, L
ine
4.2,
insi
de a
mou
nt
0.10
0(5
)Pr
oper
ties H
eld
for S
ale
Page
2, C
ol 3
, Lin
e 4.
30.
100
(6)
Encu
mbr
ance
s (Pr
oper
ty H
eld
for S
ale)
Pa
ge 2
, Lin
e 4.
3, in
side
am
ount
0.
100
(7)
Furn
iture
and
Equ
ipm
ent
L(7.
1) +
L(7
.2)
(sho
uld
equa
l Pag
e 2,
Col
3, L
ine
21)
(7.1
)
HC
Del
iver
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bjec
t to
Stat
utor
y A
cct D
epre
ciat
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Lim
itsC
ompa
ny R
ecor
ds
0.10
0(7
.2)
A
ll O
ther
Fur
nitu
re a
nd E
quip
men
t C
ompa
ny R
ecor
ds
0.10
0(8
)ED
P Eq
uipm
ent a
nd S
oftw
are
Page
2, C
ol 3
, Lin
e 20
0.10
0
(9)
Tota
l Pro
perty
and
Equ
ipm
ent
L(1)
+L(2
)+L(
3)+L
(4)+
L(5)
+L(6
)+L(
7.1)
+L(7
.2)+
L(8)
Den
otes
item
s tha
t mus
t be
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ually
ent
ered
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filin
g so
ftwar
e.
XR
010
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
ASS
ET
CO
NC
EN
TR
AT
ION
Issu
er N
ame
(2)
(3)
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Adj
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ryin
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alue
Fact
orA
dditi
onal
RB
C(1
) N
AIC
02
Una
ffili
ated
Bon
ds0.
0100
(2)
NA
IC 0
3 U
naff
iliat
ed B
onds
0.02
00(3
) N
AIC
04
Una
ffili
ated
Bon
ds0.
0450
(4)
NA
IC 0
5 U
naff
iliat
ed B
onds
0.10
00(5
) C
olla
tera
l Loa
ns0.
0500
(6)
Mor
tgag
es0.
0500
(7)
NA
IC 0
2 Pr
efer
red
Stoc
k 0.
0100
(8)
NA
IC 0
3 Pr
efer
red
Stoc
k0.
0200
(9)
NA
IC 0
4 Pr
efer
red
Stoc
k 0.
0450
(10)
NA
IC 0
5 Pr
efer
red
Stoc
k 0.
1000
(11)
NA
IC 0
2 H
ybrid
Sec
uriti
es0.
0100
(12)
NA
IC 0
3 H
ybrid
Sec
uriti
es0.
0200
(13)
NA
IC 0
4 H
ybrid
Sec
uriti
es0.
0450
(14)
NA
IC 0
5 H
ybrid
Sec
uriti
es0.
1000
(15)
Oth
er L
ong-
Term
Inve
sted
Ass
ets
0.10
00(1
6) N
AIC
02
Wor
king
Cap
ital F
inan
ce In
vest
men
ts0.
0125
(17)
Fede
ral G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts0.
0014
(18)
Fede
ral N
on-G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts0.
0260
(19)
Stat
e G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts0.
0014
(20)
Stat
e N
on-G
uara
ntee
d Lo
w In
com
e H
ousi
ng T
ax C
redi
ts0.
0260
(21)
All
Oth
er L
ow In
com
e H
ousi
ng T
ax C
redi
ts0.
0150
(22)
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ffili
ated
Com
mon
Sto
ck0.
1500
(23)
Tot
al o
f Is
suer
= L
ines
(1) t
hrou
gh (2
2)
Not
e: T
en is
suer
sect
ions
and
a g
rand
tota
l pag
e w
ill b
e av
aila
ble
on th
e fil
ing
softw
are.
The
gra
nd to
tal p
age
is c
alcu
ated
as t
he su
m o
f iss
uers
1-1
0 by
ass
et ty
pe.
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
(1)
XR
011
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
UN
DE
RW
RIT
ING
RIS
KE
xper
ienc
e Fl
uctu
atio
n R
isk
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Line
of B
usin
ess
Com
preh
ensi
ve
Med
ical
Med
icar
e Su
pple
men
tD
enta
l & V
isio
nSt
and-
Alo
ne M
edic
are
Part
D C
over
age
Oth
er H
ealth
Oth
er N
on-H
ealth
Tota
l(1
)†
Prem
ium
(2)
†Ti
tle X
VII
I-M
edic
are
XX
XX
XX
XX
XX
XX
XX
X(3
)†
Title
XIX
-Med
icai
d X
XX
XX
XX
XX
XX
XX
XX
(4)
†O
ther
Hea
lth R
isk
Rev
enue
XX
XX
XX
(5)
Und
erw
ritin
g R
isk
Rev
enue
= L
(1)+
L(2)
+L(3
)+L(
4)(6
)†
Net
Incu
rred
Cla
ims
$0X
XX
(7)
†Fe
e-Fo
r-Se
rvic
e O
ffse
t X
XX
XX
X(8
)U
nder
writ
ing
Ris
k In
curr
ed C
laim
s = L
(6)-
L(7)
XX
X
(9)
Und
erw
ritin
g R
isk
Cla
ims R
atio
= F
or C
olum
n (1
) thr
ough
(5
), L(
8)/L
(5)
1.00
0X
XX
(10)
Und
erw
ritin
g R
isk
Fact
or*
0.13
00.
130
XX
X(1
1)B
ase
Und
erw
ritin
g R
isk
RB
C =
L(5
) x L
(9) x
L(1
0)(1
2)M
anag
ed C
are
Dis
coun
t Fac
tor
XX
XX
XX
(13)
RB
C A
fter M
anag
ed C
are
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coun
t = L
(11)
x L
(12)
XX
X(1
4)†
Max
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Per
-Ind
ivid
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isk
Afte
r Rei
nsur
ance
XX
XX
XX
(15)
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rnat
e R
isk
Cha
rge
**X
XX
XX
X(1
6)A
ltern
ate
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k A
djus
tmen
tX
XX
XX
X(1
7)N
et A
ltern
ate
Ris
k C
harg
e***
X
XX
(18)
Net
Und
erw
ritin
g R
isk
RB
C (M
AX
{L(1
3),L
(17)
}) f
or
Col
umns
(1) t
hrou
gh (5
), C
olum
n (6
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11)
Com
preh
ensi
ve
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ical
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icar
e Su
pple
men
tD
enta
l & V
isio
nSt
and-
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ne M
edic
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D C
over
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er H
ealth
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er N
on-H
ealth
$0 -
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illio
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150
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50.
120
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ver $
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0A
LTER
NA
TE R
ISK
CH
AR
GE*
* **
The
Lin
e (1
5) A
ltern
ate
Ris
k C
harg
e is
cal
cula
ted
as fo
llow
s:$1
,500
,000
$50,
000
$50,
000
$150
,000
$50,
000
LESS
ER O
F:or
oror
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/A2
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divi
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axim
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vidu
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divi
dual
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k2
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axim
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vidu
al R
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otes
item
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t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.†
The A
nnua
l Sta
tem
ent S
ourc
es a
re fo
und
on p
age
XR
013.
* T
his c
olum
n is
for a
sing
le re
sult
for t
he C
ompr
ehen
sive
Med
ical
& H
ospi
tal,
Med
icar
e Su
pple
men
t and
Den
tal/V
isio
n m
anag
ed c
are
disc
ount
fact
or.
***
Lim
ited
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e la
rges
t of t
he a
pplic
able
alte
rnat
e ris
k ad
just
men
ts, p
rora
ted
if ne
cess
ary.TI
ERED
RB
C F
AC
TOR
S*
XR
012
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
edU
ND
ERW
RIT
ING
RIS
K (F
OR
INFO
RM
ATI
ON
AL
PUR
POSE
S O
NLY
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perie
nce
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tuat
ion
Ris
k(1
)(2
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)(4
)(5
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)(7
)
Line
of B
usin
ess
Com
preh
ensi
ve
Med
ical
Med
icar
e Su
pple
men
tD
enta
l & V
isio
n
Stan
d-A
lone
M
edic
are
Part
D
Cov
erag
eO
ther
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lthO
ther
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tal
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Indi
vidu
al P
rem
ium
XX
XX
XX
XX
XX
XX
(2)
Smal
l Gro
up P
rem
ium
XX
XX
XX
XX
XX
XX
(3)
Larg
e G
roup
Pre
miu
mX
XX
XX
XX
XX
XX
X(4
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Tota
l Pre
miu
m(5
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Title
XV
III-
Med
icar
e X
XX
XX
XX
XX
XX
XX
XX
(6)
†Ti
tle X
IX-M
edic
aid
XX
XX
XX
XX
XX
XX
XX
X(7
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er H
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even
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XX
XX
X(8
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nder
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k R
even
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5)+L
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Indi
vidu
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et In
curr
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laim
sX
XX
XX
XX
XX
XX
X(1
0)Sm
all G
roup
Net
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XX
XX
XX
XX
XX
XX
(11)
Larg
e G
roup
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rred
Cla
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XX
XX
XX
XX
XX
XX
(12)
†Ti
tle X
VII
I-M
edic
are
Net
Incu
rred
Cla
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XX
XX
XX
XX
XX
XX
XX
X(1
3)†
Title
XIX
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icai
d N
et In
curr
ed C
laim
sX
XX
XX
XX
XX
XX
XX
XX
(14)
Oth
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XX
XX
XX
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†To
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XX
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XX
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XX
XX
XX
XX
XX
XX
XX
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XX
XX
XX
XX
XX
XX
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XX
XX
XX
XX
XX
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X(2
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XX
XX
XX
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XX
XX
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XX
XX
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ase
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Thi
s col
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XR
012-
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nal
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ocia
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of In
sura
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mis
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Con
fiden
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Foo
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Foot
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f you
r com
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laim
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e m
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sed
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lloca
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esac
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± Th
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tnot
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nd 3
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ain:
Foot
note
3±:
Lis
t the
per
cent
age
of in
divi
dual
pre
miu
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arne
d th
at a
re w
ritte
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side
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he e
xcha
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(a)_
____
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____
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aim
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____
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aim
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n ou
tsid
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the
exch
ange
(d)_
____
___.
Foot
note
2: P
leas
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plai
n ho
w y
our c
ompa
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efin
es sm
all g
roup
for t
he p
urpo
ses o
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s for
m a
nd w
hat i
s the
sour
ce o
f you
r com
pany
's da
ta._
____
___
Foot
note
1a:
If y
our c
ompa
ny is
una
ble
to c
ompl
ete
this
sche
dule
, ple
ase
prov
ide
an e
xpla
natio
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Foot
note
1b:
If y
our c
ompa
ny a
lloca
ted
Line
(4) a
nd (1
5) in
to L
ines
(1) t
hrou
gh (3
) and
Lin
es (9
) thr
ough
(11)
, des
crib
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e ba
sis o
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allo
catio
n
Foot
note
1c:
Doe
s the
allo
catio
n ba
sis r
efle
ct e
stim
ated
impa
cts o
f the
AC
A re
insu
ranc
e, ri
sk a
djus
tmen
ts a
nd ri
sk c
orrid
or?
Yes
____
__ N
o___
___.
XR
012-
A©
199
8-20
17 N
atio
nal
Ass
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of In
sura
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Com
mis
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10/2
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Con
fiden
tial w
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Com
plet
ed
† A
nnua
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tem
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XV
III-
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, C7,
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XX
XX
XX
XX
XX
XX
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Title
XIX
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XX
XX
XX
XX
XX
XX
XX
XP7
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5,
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XX
X
(7)
Fee-
For-
Serv
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Off
set
P7, C
2, L
3X
XX
P7, C
4 &
C5
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XX
X
(14)
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Gen
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t 2 5
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XX
XX
XX
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filin
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XR
013
© 1
998-
2017
Nat
iona
l A
ssoc
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Insu
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omm
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s10
/20/
2017
Con
fiden
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P7, C
4 &
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P7, C
10, L
1 +
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(5)
Title
XV
III-
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, C7,
L1
+ L2
XX
XX
XX
XX
XX
XX
XX
XP7
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(6)
Title
XIX
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L1
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XX
XX
XX
XX
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XX
XX
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17X
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XX
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Net
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3X
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XX
XX
XX
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013-
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Con
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BC
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L(27
) - L
(27.
1) +
L(2
7.2)
(2
7.4)
Earn
ed P
rem
ium
in L
(27.
3) [u
p to
$50
mill
ion
less
Pre
miu
m in
line
s (25
.1)+
(26.
1)]
0.10
0(2
7.5)
Earn
ed P
rem
ium
in L
(27.
3) n
ot in
clud
ed in
L(2
7.4)
0.03
0(2
7.6)
Tota
l Dis
abili
ty In
com
e - C
redi
t Sin
gle
Prem
ium
with
Add
ition
al R
eser
ves
L(27
.4) +
L(2
7.5)
(2
8)D
isab
ility
Inco
me
- Cre
dit S
ingl
e Pr
emiu
m w
ithou
t Add
ition
al R
eser
ves
Com
pany
Rec
ords
(2
8.1)
Earn
ed P
rem
in L
(28)
[up
to $
50 m
illio
n le
ss P
rem
in L
ines
(25.
1)+(
26.1
)+(2
7.4)
] 0.
150
(28.
2)
Ea
rned
Pre
miu
m in
L(2
8) n
ot in
clud
ed in
L(2
8.1)
0.03
0(2
8.3)
Tota
l Dis
abili
ty In
com
e - C
redi
t Sin
gle
Prem
ium
with
out A
dditi
onal
Res
erve
sL(
28.1
) + L
(28.
2)(2
9)D
isab
ility
Inco
me
- Gro
up S
hort-
term
C
ompa
ny R
ecor
ds
(29.
1)
Ea
rned
Pre
m in
L(2
9) [u
p to
$50
mill
ion
less
Pre
m in
line
s (25
.1)+
(26.
1)+(
27.4
)+(2
8.1)
]0.
050
(29.
2)
Ea
rned
Pre
miu
m in
L(2
9) n
ot in
clud
ed in
L(2
9.1)
0.
030
(29.
3)
To
tal D
isab
ility
Inco
me
- Gro
up S
hort-
term
L(29
.1) +
L(2
9.2)
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.*
A fa
ctor
of .
350
will
be
appl
ied
to th
e fir
st $
25,0
00,0
00 in
Col
umn
(1),
Lin
e (2
2) a
nd a
fact
or o
f .25
0 w
ill b
e ap
plie
d to
the
rem
iain
ing
prem
ium
in e
xces
s of $
25,0
00,0
00.
XR
014
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
(1)
(2)
Lon
g-T
erm
Car
e (L
TC
) Ins
uran
ce P
rem
ium
Ann
ual S
tate
men
t Sou
rce
Am
ount
Fact
orR
BC
Req
uire
men
t
(30)
Non
canc
ella
ble
LTC
Pre
miu
m -
Rat
e R
isk
Com
pany
Rec
ords
0.10
0*
(31)
All
LTC
Pre
miu
m -
Mor
bidi
ty R
isk
(to $
50 m
illio
n)Li
ne (3
4.1)
Col
umn
(1) u
p to
$50
mill
ion
0.10
0(3
2)LT
C P
rem
ium
(ove
r $50
mill
ion)
- M
orbi
dity
Ris
kR
emai
nder
of L
ine
(34.
1) C
olum
n (1
) ove
r $50
mill
ion
0.03
0(3
3)Pr
emiu
m-b
ased
RB
CC
ol (2
), Li
ne (3
0) +
Lin
e (3
1) +
Lin
e (3
2)
(1)
(2)
(3)
(4)
Col
. (2)
/(1)
§H
isto
rica
l Los
s Rat
io E
xper
ienc
eA
nnua
l Sta
tem
ent S
ourc
ePr
emiu
ms
Incu
rred
Cla
ims
Loss
Rat
ioR
BC
Req
uire
men
t
(34.
1)
Cur
rent
Yea
rC
ompa
ny R
ecor
ds(3
4.2)
I
mm
edia
te P
rior Y
ear
Com
pany
Rec
ords
(34.
3)
Ave
rage
Los
s Rat
ioIf
loss
ratio
s are
use
d, [C
olum
n (3
), Li
ne (3
4.1)
+ Li
ne (3
4.2)
/2, o
ther
wis
e ze
ro]
(35)
Adj
uste
d LT
C C
laim
s for
RB
CIf
Col
umn
(3) L
ine
(34.
3) <
> 0,
then
[Col
umn
(1),
Line
(31)
XR
+ Li
ne (3
2)] x
Col
umn
(3),
Line
(34.
3), e
lse
Col
umn
(2)
Line
(34.
1)
(35.
1)C
laim
s (to
$35
mill
ion)
- M
orbi
dity
Ris
kLo
wer
of C
ol.(2
), Li
ne (3
5) a
nd $
35 m
illio
n0.
370
†(3
5.2)
Cla
ims (
over
$35
mill
ion)
- M
orbi
dity
Ris
kEx
cess
of C
ol. (
2), L
ine
(35)
ove
r $35
mill
ion
0.12
0‡
(36)
LTC
Cla
ims R
eser
ves
Com
pany
Rec
ords
0.05
0(3
7)C
laim
s-ba
sed
RB
CC
ol. (
4), L
(35.
1) +
L (3
5.2)
(38)
LTC
RB
CC
ol. (
2),
L (3
3) +
Col
. (4)
, L (3
6) +
L(3
7)
*Th
e fa
ctor
app
lies t
o al
l Non
cane
llabl
e pr
emiu
m.
†If
Col
umn
(1),
Line
(34.
1) is
pos
itive
, the
n a
fact
or o
f 0.2
50 is
use
d. O
ther
wis
e, a
hig
her f
acto
r of 0
.370
is u
sed
‡If
Col
umn
(1),
Line
(34.
1) is
pos
itive
, the
n a
fact
or o
f 0.0
80 is
use
d. O
ther
wis
e, a
hig
her f
acto
r of 0
.120
is u
sed
§If
Col
umn
(1),
Line
(34.
1) o
r (34
.2) a
re le
ss th
an o
r equ
al to
zer
o or
if C
olum
n (2
), Li
ne (3
4.1)
or (
34.2
) are
less
than
zer
o, th
e lo
ss ra
tios
are
notu
sed
and
Col
umn
(3),
Line
(34.
3) is
set t
o ze
ro.
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
XR
015
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
(1)
(2)
Lim
ited
Ben
efit
Plan
s (In
divi
dual
and
Gro
up C
ombi
ned)
Ann
ual S
tate
men
t Sou
rce
Am
ount
Fact
orR
BC
Req
uire
men
t
(39)
Hos
pita
l Ind
emni
ty a
nd S
peci
fied
Dis
ease
Incl
uded
in P
age
7, C
ol 9
, Lin
e 1
and
2, in
par
t0.
035
(39.
1)50
,000
if L
(39)
is g
reat
er th
an z
ero
(39.
2)To
tal H
ospi
tal I
ndem
nity
and
Spe
cifie
d D
isea
seL(
39) +
L (3
9.1)
(40)
Acc
iden
tal D
eath
& D
ism
embe
rmen
tIn
clud
ed in
Pag
e 7,
Col
9, L
ine
1 an
d 2,
in p
art
(40.
1)Fi
rst 1
0 M
illio
n Ea
rned
Pre
miu
m o
f L(4
0)0.
055
(40.
2)O
ver 1
0 M
illio
n Ea
rned
Pre
miu
m o
f L (4
0)0.
015
(40.
3)M
axim
um R
etai
ned
Ris
k fo
r any
sing
le c
laim
Com
pany
Rec
ords
(40.
4)Th
ree
times
L (4
0.3)
(40.
5)Le
sser
of L
(40.
4) o
r $30
0,00
0(4
0.6)
Tota
l AD
&D
L(40
.1) +
L(4
0.2)
+ L
(40.
5)
(41)
Oth
er A
ccid
ent
Incl
uded
in P
age
7, C
ol 9
, Lin
e 1
and
2, in
par
t0.
050
(42)
Prem
ium
Sta
biliz
atio
n R
eser
ves
Incl
uded
in U
&I,
Part
2D, C
ol 1
, Lin
e 4
-0.5
00
(43)
Tota
l Oth
er U
nder
writ
ing
Ris
kL(
22.2
)+L(
23.3
)+L(
24.3
)+L(
25.3
)+
L(26
.3)+
L(27
.6)+
L(28
.3)+
L(29
.3)+
L(38
)+
L(39
.2)+
L(40
.6)+
L(41
)+L(
42)
This
is li
mite
d to
the
tota
l Net
Und
erw
ritin
g R
BC
on
XR
012,
Col
(7),
Line
(18)
Les
s Col
(4),
and
XR
014,
Col
(2),
Line
s (22
.2),
(23.
3),(2
4.3)
,(25.
3),
(26.
3),(2
7.6)
,(28.
3),(2
9.3)
, XR
015
Col
(2),
Lin
e (3
3) a
nd X
R01
6 C
ol (2
), Li
nes (
39.2
), (4
0.6)
, and
(41)
.
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
XR
016
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
UN
DE
RW
RIT
ING
RIS
K -
Man
aged
Car
e C
redi
t Cal
cula
tion
(1)
(2)
(3)
(4)
Part
DPa
i dW
eigh
ted
Wei
ghte
d M
anag
ed C
are
Cla
ims P
aym
ents
Ann
ual S
tate
men
t Sou
rce
Fact
o rC
laim
sC
laim
s†C
laim
s‡
(1)
Cat
egor
y 0
- A
rran
gem
ents
not
Incl
uded
in O
ther
Cat
egor
ies
Exhi
bit 7
, Pt 1
, Col
1, L
ine
5, in
par
t §0
(2)
Cat
egor
y 1
- Pa
ymen
ts M
ade
Acc
ordi
ng to
Con
tract
ual A
rran
gem
ents
Exhi
bit 7
, Pt 1
, Col
1, L
ine
6, in
par
t §
0.15
0
(3)
Cat
egor
y 2a
- S
ubje
ct to
With
hold
s or B
onus
es -
Oth
erw
ise
Cat
egor
y 0
Exhi
bit 7
, Pt 1
, Col
1, L
ine
7, in
par
t §*
(4)
Cat
egor
y 2b
- S
ubje
ct to
With
hold
s or B
onus
es -
Oth
erw
ise
Cat
egor
y 1
Exhi
bit 7
, Pt 1
, Col
1, L
ine
8, in
par
t §
*
(5)
Cat
egor
y 3a
- C
apita
ted
Paym
ents
Dire
ctly
to P
rovi
ders
0.60
0(5
.1)
C
apita
tion
Paym
ents
- M
edic
al G
roup
- C
ateg
ory
3aEx
hibi
t 7, P
t 1, C
ol 1
, Lin
e 1,
in p
art §
(5
.2)
C
apita
tion
Paym
ents
- A
ll O
ther
Pro
vide
rs -
Cat
egor
y 3a
Exhi
bit 7
, Pt 1
, Col
1, L
ine
3, in
par
t §
(6)
Cat
egor
y 3b
- C
apita
ted
Paym
ents
to R
egul
ated
Inte
rmed
iarie
sIn
clud
ed in
Exh
ibit
7, P
t 1, C
ol 1
, Lin
e 2
§0.
600
(7)
Cat
egor
y 3c
- C
apita
ted
Paym
ents
to N
on-R
egul
ated
Inte
rmed
iarie
sIn
clud
ed in
Exh
ibit
7, P
t 1, C
ol 1
, Lin
e 2
§0.
600
(8)
Cat
egor
y 4
- M
edic
al &
Hos
pita
l Exp
ense
Pai
d as
Sal
ary
to P
rovi
ders
0.75
0(8
.1)
N
on-c
ontin
gent
Sal
arie
s - C
ateg
ory
4Ex
hibi
t 7, P
t 1, C
ol 1
, Lin
e 9,
in p
art §
(8.2
)
Agg
rega
te C
ost A
rran
gem
ents
- C
ateg
ory
4Ex
hibi
t 7, P
t 1, C
ol 1
, Lin
e 10
, in
part
§(8
.3)
L
ess F
ee F
or S
ervi
ce re
venu
e fr
om A
SC o
r ASO
Com
pany
Rec
ords
(9)
Sub-
Tota
l Pai
d C
laim
sEx
hibi
t 7, P
t 1, C
ol 1
, Lin
e 13
- Li
ne 1
1 - L
ine
(8.3
)- L
ine
(12)
- Li
ne (1
3)St
and-
Alo
ne M
edic
are
Part
D C
over
age
Cla
im P
aym
ents
(10)
Cat
egor
y 0
- No
Fede
ral R
eins
uran
ce o
r Ris
k C
orrid
or P
rote
ctio
nC
ompa
ny R
ecor
dsxx
xxx
xxx
x(1
1)C
ateg
ory
1 - F
eder
al R
eins
uran
ce b
ut n
o R
isk
Cor
ridor
Pro
tect
ion
Com
pany
Rec
ords
xxx
xxx
xxx
(12)
Cat
egor
y 2a
- N
o Fe
dera
l Rei
nsur
ance
but
Ris
k C
orrid
or P
rote
ctio
nC
ompa
ny R
ecor
ds0.
667
(13)
Cat
egor
y 3a
- Fe
dera
l Rei
nsur
ance
and
Ris
k C
orrid
or P
rote
ctio
n A
pply
Com
pany
Rec
ords
0.76
7
(14)
Sub-
Tota
l Pai
d C
laim
sSu
m o
f Lin
es (1
0) th
roug
h (1
3)
(15)
Tota
l Pai
d C
laim
sSu
m o
f Lin
es (9
) and
(14)
(16)
Wei
ghte
d A
vera
ge M
anag
ed C
are
Dis
coun
t(1
7)W
eigh
ted
Ave
rage
Man
aged
Car
e R
isk
Adj
ustm
ent F
acto
r
† Th
is c
olum
n is
for a
sing
le re
sult
for t
he C
ompr
ehen
sive
Med
ical
& H
ospi
tal,
Med
icar
e Su
pple
men
t and
Den
tal/V
isio
n m
anag
ed c
are
disc
ount
fact
or.
‡ Th
is c
olum
n is
for t
he M
edic
are
Part
D m
anag
ed c
are
disc
ount
fact
or.
§St
and-
alon
e M
edic
are
Part
D b
usin
ess r
epor
ted
in L
ines
(12)
and
(13)
wou
ld b
e ex
clud
ed fr
om th
ese
amou
nts.
*Th
e fa
ctor
is c
alcu
late
d on
pag
e X
R01
8. D
enot
es it
ems t
hat m
ust b
e m
anua
lly e
nter
ed o
n fil
ing
softw
are.
XR
017
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
(1)
Ann
ual S
tate
men
t Sou
rce
Am
ount
* C
alcu
latio
n of
Cat
egor
y 2
Man
aged
Car
e Fa
ctor
(18)
With
hold
& B
onus
Pay
men
ts, P
rior Y
ear
Com
pany
Rec
ords
(19)
With
hold
& B
onus
es A
vaila
ble,
Prio
r Yea
rC
ompa
ny R
ecor
ds(2
0)M
CC
Mul
tiplie
r - A
vera
ge W
ithho
ld R
etur
ned
[L(1
8)/L
(19)
](2
1)W
ithho
lds &
Bon
uses
Ava
ilabl
e,Pr
ior Y
ear
Com
pany
Rec
ords
(22)
Cla
ims P
aym
ents
Sub
ject
to W
ithho
ld, P
rior Y
ear
Com
pany
Rec
ords
(23)
Ave
rage
With
hold
Rat
e, P
rior Y
ear [
L(21
)/L(2
2)]
(24)
MC
C D
isco
unt F
acto
r, C
ateg
ory
2 M
in{.
25,[L
(20)
x L
(23)
]}
*Th
e fa
ctor
is p
ulle
d in
to L
ines
(3) a
nd (4
) on
page
XR
017.
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e. XR
018
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
CR
ED
IT R
ISK
(1)
(2)
Ann
ual S
tate
men
t Sou
rce
Am
ount
Fact
orR
BC
Req
uire
men
tR
eins
uran
ce C
eded
(1)
Rec
over
able
s on
Paid
Los
ses -
100
% O
wne
d A
ffili
ates
Incl
uded
in S
ch S
, Pt 2
, Col
6, L
ine
1899
999
(2)
Rec
over
able
s on
Paid
Los
ses -
Oth
er A
ffili
ates
Incl
uded
in S
ch S
, Pt 2
, Col
6, L
ine
1899
999
0.00
5(3
)R
ecov
erab
les o
n Pa
id L
osse
s - N
on-A
ffili
ates
(Exc
ludi
ng A
CA
Rei
nsur
ance
)In
clud
ed in
Sch
S, P
t 2, C
ol 6
, Lin
e 21
9999
9(4
)R
ecov
erab
les o
n Pa
id L
osse
s - A
ffor
dabl
e C
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ol (2
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ess S
ecur
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tal C
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term
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ually
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e.
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2017
Nat
iona
l A
ssoc
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n of
Insu
ranc
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omm
issi
oner
s10
/20/
2017
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fiden
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plet
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Ann
ual S
tate
men
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Am
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s Rec
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atin
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nsur
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iden
t and
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lans
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2)A
mou
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ually
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e.
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020
© 1
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2017
Nat
iona
l A
ssoc
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Insu
ranc
e C
omm
issi
oner
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/20/
2017
Con
fiden
tial w
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plet
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ESS
RIS
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nnua
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tem
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pens
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ine
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4, C
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ate
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oved
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form
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enot
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ems t
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ust b
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lly e
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f you
r co
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ny is
a st
art-
up h
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our
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mou
nts i
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© 1
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2017
Nat
iona
l A
ssoc
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n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
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fe S
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. S, P
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item
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ually
ent
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XR
022
© 1
998-
2017
Nat
iona
l A
ssoc
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n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
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Com
plet
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FED
ER
AL
AC
A R
ISK
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JUST
ME
NT
AN
D R
ISK
CO
RR
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R02
6, C
ol. (
2), L
ine
(6)
(9)
Tota
l Adj
uste
d C
apita
l Stre
ssed
for R
isk
Adj
ustm
ents
Line
(8) -
Lin
e (7
)(1
0)A
utho
rized
Con
trol L
evel
RB
CX
R02
7 C
ompa
rison
of T
otal
Adj
uste
d C
apita
l to
Ris
k-B
ased
Cap
ital L
ine
(4)
(11)
AC
A R
isk
Adj
uste
d A
CL
RB
C R
atio
Line
(9)/L
ine
(10)
Und
eres
timat
ion
of 2
5%(1
2)Pr
emiu
m A
djus
tmen
ts R
ecei
vabl
e D
ue to
AC
A R
isk
Adj
ustm
ent
Col
. (1)
, Lin
e (1
)1.
250.
500
(13)
Prem
ium
Adj
ustm
ents
Pay
able
Due
to A
CA
Ris
k A
djus
tmen
t C
ol. (
1), L
ine
(2)
1.25
0.50
0(1
4)To
tal A
CA
Ris
k A
djus
tmen
ts P
ayab
le le
ss R
ecei
vabl
eLi
ne (1
3) -
Line
(12)
(15)
Acc
rued
Ret
rosp
ectiv
e Pr
emiu
m D
ue to
AC
A R
isk
Cor
ridor
sC
ol. (
1), L
ine
(4)
1.25
0.50
0(1
6)R
eser
ve fo
r Rat
e C
redi
ts o
r Pol
icy
Expe
rienc
e R
atin
g R
efun
ds
Due
to A
CA
Ris
k C
orrid
ors
Col
. (1)
, Lin
e (5
)1.
250.
500
(17)
Tota
l AC
A R
isk
Cor
ridor
Ret
rosp
ectiv
e Pr
emiu
m a
nd R
ate
Line
(16)
- Li
ne (1
5) C
redi
ts o
r Pol
icy
Expe
rienc
e R
atin
g R
efun
ds (N
et)
(18)
Tota
l Ris
k A
djus
tmen
t and
Ris
k C
orrid
orA
bsol
ute
Val
ue o
f (Li
ne (1
4) +
Lin
e (1
7))
(19)
Tota
l Adj
uste
d C
apita
l, Po
st-d
efer
red
Tax
XR
026,
Col
. (2)
, Lin
e (6
)(2
0)To
tal A
djus
ted
Cap
ital S
tress
ed fo
r Ris
k A
djus
tmen
tsLi
ne (1
9) -
Line
(18)
(21)
Aut
horiz
ed C
ontro
l Lev
el R
BC
XR
027
Com
paris
on o
f Tot
al A
djus
ted
Cap
ital t
o R
isk-
Bas
ed C
apita
l Lin
e (4
)(2
2)A
CA
Ris
k A
djus
ted
AC
L R
BC
Rat
ioLi
ne (2
0)/L
ine
(21)
Foot
note
: If i
t is t
he b
elie
f of t
he c
ompa
ny th
at th
e fa
ctor
s are
not
app
ropr
iate
, pro
vide
an
expl
anat
ion
as to
why
the
fact
ors a
re in
appr
opria
te. _
____
____
____
____
___
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
____
__
XR
023
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
CA
LC
UL
AT
ION
OF
TO
TA
L R
ISK
-BA
SED
CA
PIT
AL
AFT
ER
CO
VA
RIA
NC
E(1
)R
BC
Am
ount
H0
- ASS
ET
RIS
K -
AFF
ILIA
TE
S W
/RB
C(1
)O
ff-B
alan
ce S
heet
Item
sX
R00
5, O
ff-B
alan
ce S
heet
Pag
e, L
(21)
(2)
Dire
ctly
Ow
ned
Insu
rer S
ubje
ct to
RB
CX
R00
3, A
ffili
ates
Pag
e, L
(1)
(3)
Indi
rect
ly O
wne
d In
sure
r Sub
ject
to R
BC
XR
003,
Aff
iliat
es P
age,
L(2
)(4
)D
irect
ly O
wne
d H
ealth
Ent
ity S
ubje
ct to
RB
CX
R00
3, A
ffili
ates
Pag
e, L
(3)
(5)
Indi
rect
ly O
wne
d H
ealth
Ent
ity S
ubje
ct to
RB
CX
R00
3, A
ffili
ates
Pag
e, L
(4)
(6)
Dire
ctly
Ow
ned
Alie
n In
sure
rX
R00
3, A
ffili
ates
Pag
e, L
(7)
(7)
Indi
rect
ly O
wne
d A
lien
Insu
rers
XR
003,
Aff
iliat
es P
age,
L(8
)(8
)To
tal H
0Su
m L
(1) t
hrou
gh L
(7)
H1
- ASS
ET
RIS
K -
OT
HE
R(9
)In
vest
men
t Aff
iliat
esX
R00
3, A
ffili
ates
Pag
e, L
(5)
(10)
Hol
ding
Com
pany
Exc
ess o
f Sub
sidi
arie
sX
R00
3, A
ffili
ates
Pag
e, L
(6)
(11)
Inve
stm
ent i
n Pa
rent
XR
003,
Aff
iliat
es P
age,
L(9
)(1
2)O
ther
Aff
iliat
esX
R00
3, A
ffili
ates
Pag
e, L
(10)
(13)
Fair
Val
ue E
xces
s Aff
iliat
e C
omm
on S
tock
XR
003,
Aff
iliat
es P
age,
L(1
1)(1
4)Fi
xed
Inco
me
Ass
ets
XR
006,
Off
-Bal
ance
She
et C
olla
tera
l, L(
9) +
L(1
9) +
L(2
0) +
L(2
1) +
X
R00
7, F
ixed
Inco
me
Ass
ets P
age,
L(3
3)(1
5)R
eplic
atio
n &
Man
dato
ry C
onve
rtibl
e Se
curit
ies
XR
008,
Rep
licat
ion/
MC
S Pa
ge, L
(999
9999
)(1
6)U
naff
iliat
ed P
refe
rred
Sto
ck a
nd H
ybrid
Sec
uriti
esX
R00
6, O
ff-B
alan
ce S
heet
Col
late
ral,
L(16
) + X
R00
9, E
quity
Ass
ets
Page
, L(1
5)(1
7)U
naff
iliat
ed C
omm
on S
tock
XR
006,
Off
-Bal
ance
She
et C
olla
tera
l, L(
17) +
XR
009,
Equ
ity A
sset
s Pa
ge, L
(21)
(18)
Prop
erty
& E
quip
men
tX
R00
6, O
ff-B
alan
ce S
heet
Col
late
ral,
L(18
) + X
R01
0, P
rop/
Equi
p A
sset
s Pag
e, L
(9)
(19)
Ass
et C
once
ntra
tion
XR
011,
Gra
nd T
otal
Ass
et C
once
ntra
tion
Page
, L(2
3)(2
0)To
tal H
1Su
m L
(9) t
hrou
gh L
(19)
H2
- UN
DE
RW
RIT
ING
RIS
K(2
1)N
et U
nder
writ
ing
Ris
kX
R01
2, U
nder
writ
ing
Ris
k Pa
ge, L
(18)
(22)
Oth
er U
nder
writ
ing
Ris
kX
R01
4, U
nder
writ
ing
Ris
k Pa
ge, L
(22.
2)(2
3)D
isab
ility
Inco
me
XR
014,
Und
erw
ritin
g R
isk
Page
, L(2
3.3)
+L(2
4.3)
+L(2
5.3)
+(2
6.3)
+(27
.6)+
(28.
3)+(
29.3
)(2
4)Lo
ng-T
erm
Car
eX
R01
5, U
nder
writ
ing
Ris
k Pa
ge, L
(38)
(25)
Lim
ited
Ben
efit
Plan
sX
R01
6, U
nder
writ
ing
Ris
k Pa
ge, L
(39.
2)+L
(40.
6)+L
(41)
(26)
Prem
ium
Sta
biliz
atio
n R
eser
veX
R01
6, U
nder
writ
ing
Ris
k Pa
ge, L
(42)
(27)
Tota
l H2
Sum
L(2
1) th
roug
h L(
26)
D
enot
es it
ems t
hat m
ust b
e m
anua
lly e
nter
ed o
n fil
ing
softw
are.
XR
024
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
CA
LC
UL
AT
ION
OF
TO
TA
L R
ISK
-BA
SED
CA
PIT
AL
AFT
ER
CO
VA
RIA
NC
E(1
)R
BC
Am
ount
H3
- CR
ED
IT R
ISK
(28)
Tota
l Rei
nsur
ance
RB
CX
R01
9, C
redi
t Ris
k Pa
ge, L
(21)
(29)
Inte
rmed
iarie
s Cre
dit R
isk
RB
CX
R01
9, C
redi
t Ris
k Pa
ge, L
(28)
(30)
Tota
l Oth
er R
ecei
vabl
es R
BC
XR
020,
Cre
dit R
isk
Page
, L(3
4)(3
1)To
tal H
3Su
m L
(28)
thro
ugh
L(30
)
H4
- BU
SIN
ESS
RIS
K(3
2)A
dmin
istra
tive
Expe
nse
RB
CX
R02
1, B
usin
ess R
isk
Page
, L(7
)(3
3)N
on-U
nder
writ
ten
and
Lim
ited
Ris
k B
usin
ess R
BC
XR
021,
Bus
ines
s Ris
k Pa
ge, L
(11)
(34)
Prem
ium
s Sub
ject
to G
uara
nty
Fund
Ass
essm
ents
XR
021,
Bus
ines
s Ris
k Pa
ge, L
(12)
(35)
Exce
ssiv
e G
row
th R
BC
XR
021,
Bus
ines
s Ris
k Pa
ge, L
(19)
(36)
Tota
l H4
Sum
L(3
2) th
roug
h L(
35)
(37)
RB
C a
fter C
ovar
ianc
e B
efor
e B
asic
Ope
ratio
nal R
isk
H0
+ Sq
uare
Roo
t of (
H12 +H
22 +H32 +H
42 )(3
8)B
asic
Ope
ratio
nal R
isk
0.00
0 x
L(3
7)(3
9)R
BC
Aft
er C
ovar
ianc
e In
clud
ing
Bas
ic O
pera
tiona
l Ris
k L
(37)
+ L
(38)
(40)
Aut
horiz
ed C
ontro
l Lev
el R
BC
.50
x L
(39)
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
XR
025
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
CA
LC
UL
AT
ION
OF
TO
TA
L A
DJU
STE
D C
API
TA
L(1
)(2
)A
nnua
l Sta
tem
ent S
ourc
eA
mou
ntFa
ctor
Adj
uste
d C
apita
lC
ompa
ny A
mou
nts
(1)
Cap
ital a
nd S
urpl
usPa
ge 3
, Col
3, L
ine
33$0
1.00
0
Subs
idia
ry A
djus
tmen
ts(2
)A
VR
- Li
fe S
ubsi
diar
ies
Aff
iliat
e's st
atem
ent
§1.
000
(3)
Div
iden
d Li
abili
ty -
Life
Sub
sidi
arie
sA
ffili
ate's
stat
emen
t0.
500
(4)
Tabu
lar D
isco
unts
- P&
C S
ubsi
diar
ies
Aff
iliat
e's st
atem
ent
-1.0
00(5
)N
on-T
abul
ar D
isco
unts
- P&
C S
ubsi
diar
ies
Aff
iliat
e's st
atem
ent
-1.0
00
(6)
Tota
l Adj
uste
d C
apita
l,Po
st-d
efer
red
Tax
Sens
itivi
ty T
est:
(7)
DTA
Val
ue fo
r Com
pany
Page
2, C
ol 3
, Li
ne 1
8.2
1.00
0(8
)D
TL V
alue
for C
ompa
nyPa
ge 3
, Col
3, L
ine
10.2
1.00
0
(9)
DTA
Val
ue fo
r Ins
uran
ce S
ubsi
diar
ies
Com
pany
Rec
ords
1.00
0(1
0)D
TL V
alue
for I
nsur
ance
Sub
sidi
arie
sC
ompa
ny R
ecor
ds1.
000
(11)
Tota
l Adj
uste
d C
apita
l, Pr
e-de
ferr
ed T
ax (s
ensi
tivity
) L(
6) -
L(7)
+ L
(8) -
L(9
) +L(
10)
Ex
DT
A A
CL
RB
C R
atio
Sen
sitiv
ity T
est
(12)
Def
erre
d Ta
x A
sset
Page
2 C
olum
n 3
Line
18.
21.
000
(13)
Tota
l Adj
uste
d C
apita
l Les
s Def
erre
d Ta
x A
sset
Line
(6) l
ess L
ine
(12)
(14)
Aut
horiz
ed C
ontro
l Lev
el R
BC
XR
027
Com
paris
on o
f Tot
al A
djus
ted
Cap
ital t
o R
isk-
Bas
ed C
apita
l Lin
e (4
)(1
5)Ex
DTA
AC
L R
BC
Rat
ioLi
ne (1
3) /
Line
(14)
0.
000%
AC
A F
ee R
BC
Rat
io S
ensi
tivity
Tes
t
(16)
AC
A F
ee (D
ata
Yea
r Am
ount
to b
e Pa
id in
the
Fee
Yea
r)N
ote
22B
1.
000
$0(1
7)To
tal A
djus
ted
Cap
ital L
ess A
CA
Fee
Line
(6) l
ess L
ine
(16)
$0
(18)
Aut
horiz
ed C
ontro
l Lev
el R
BC
XR
027
Com
paris
on o
f Tot
al A
djus
ted
Cap
ital t
o R
isk-
Bas
ed C
apita
l Lin
e (4
)$0
(19)
AC
A F
ee R
BC
Rat
ioLi
ne (1
7) /
Line
(18)
0.
000%
§Th
e po
rtion
of t
he A
VR
that
can
be
coun
ted
as c
apita
l is l
imite
d to
the
amou
nt n
ot u
tiliz
ed in
ass
et a
dequ
acy
test
ing
in su
ppor
t of t
he A
ctua
rial O
pini
on fo
r res
erve
s. D
enot
es it
ems t
hat m
ust b
e m
anua
lly e
nter
ed o
n fil
ing
softw
are.
XR
026
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
Con
fiden
tial w
hen
Com
plet
ed
CO
MPA
RIS
ON
OF
TO
TA
L A
DJU
STE
D C
API
TA
L T
O R
ISK
-BA
SED
CA
PIT
AL
(1
)(2
)A
bbre
viat
ion
Am
ount
Res
ult
(1)
Tota
l Adj
uste
d C
apita
l, P
ost T
ax
(2)
Com
pany
Act
ion
Leve
l=20
0% o
f Aut
horiz
ed C
ontro
l Lev
elC
AL
(3)
Reg
ulat
ory
Act
ion
Leve
l=15
0% o
f Aut
horiz
ed C
ontro
l Lev
elR
AL
(4)
Aut
horiz
ed C
ontro
l Lev
el=1
00%
of A
utho
rized
Con
trol L
evel
AC
L(5
)M
anda
tory
Con
trol L
evel
=70%
of A
utho
rized
Con
trol L
evel
MC
L
(6)
Leve
l of A
ctio
n, if
Any
TH
E F
OL
LO
WIN
G N
UM
BE
RS
MU
ST B
E R
EPO
RT
ED
IN T
HE
FIV
E Y
EA
R H
IST
OR
Y O
N T
HE
IND
ICA
TE
D L
INE
Tota
l Adj
uste
d C
apita
l on
Line
14
of th
e Fi
ve-Y
ear H
isto
rical
Dat
a Pa
geA
utho
rized
Con
trol L
evel
Ris
k-B
ased
Cap
ital o
n Li
ne 1
5 of
the
Five
-Yea
r His
toric
al D
ata
Page
TREN
D T
EST
Ann
ual S
tate
men
t Sou
rce
(7)
Tota
l Rev
enue
Page
4, L
ine
8(8
)U
nder
writ
ing
Ded
uctio
nsPa
ge 4
, Lin
e 23
(9)
Com
bine
d R
atio
Line
(8)/L
ine
(7)
0.00
0%(1
0)R
BC
Rat
ioLi
ne(1
)/Lin
e (4
)0.
000%
(11)
Tren
d Te
st R
esul
tIf
Lin
e (1
0) is
bet
wee
n 20
0% a
nd 3
00%
and
Lin
e (9
) > 1
05%
, the
n "Y
es,"
oth
erw
ise
"No"
(12)
Leve
l of A
ctio
n, if
any
, inc
ludi
ng T
rend
Tes
t
Den
otes
item
s tha
t mus
t be
man
ually
ent
ered
on
filin
g so
ftwar
e.
XR
027
© 1
998-
2017
Nat
iona
l A
ssoc
iatio
n of
Insu
ranc
e C
omm
issi
oner
s10
/20/
2017
© 1998-2017 National Association of Insurance Commissioners
The Health RBC Forecasting CD-ROM contains a spreadsheet that calculates RBC using the same formula presented in the 2017 NAIC Health Risk-Based Capital Report Including Overview & Instructions for Companies. (A hardcopy of this booklet is mailed with the forecasting CD-ROM or is available for download from the NAIC Publications Department.)
This forecasting spreadsheet can be used to check RBC results throughout the year to get an early look at RBC results before the RBC vendor filing software may be available, or to evaluate “what-if” scenarios.
Health Risk-Based Capital Forecasting
Spreadsheet Instructions
WARNING!The Risk-Based Capital Forecasting Spreadsheet CANNOT be used to meet the year-end risk-based capital electronic filing requirement. Risk-based capital filing software from an annual statement software vendor should be used to create the electronic filing. If the forecasting worksheet is sent instead of an electronic filing, it will not be accepted, and the RBC will not have been filed.
About the File
The spreadsheet Forecast_Health_2017_10_ 20.xlsm was created in Microsoft Excel. The spreadsheet can be used with Microsoft Excel version 14.0 or higher. The spreadsheet includes menus for use in navigation between pages and for printing.
The RBC spreadsheet above follows the 2017 NAIC Health Risk-Based Capital Report Including Overview and Instructions for Companies formula pages. A copy of the instructions and blank are included with the CD-ROM to assist in the completion of the forecasting file.
User Requirements
• A Microsoft Windows® version of Microsoft Excel 2010 (or compatible versions).
• Four megabytes of hard disk space. • A good understanding of spreadsheet
software.
Installation from the CD-ROM
To install the spreadsheet files, start Windows Explorer and go to the CD-ROM drive where the forecasting spreadsheet is located.
Copy and Paste the Forecast_Health_2017_ 10_20.xlsm file in the directory where you would like the file to be saved.
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FO
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Risk-Based Capital
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.
For more information, visit www.naic.org.
RBC- HEF- 17
