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what is risk based capital and why it is important

what is risk based capital and why it is important
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Risk based capital is a measure of capital that insurance agencies must have available so as to mitigate against their risks. This capital is there to ensure that the organization can look after dissolvability, and can satisfy the entirety of its monetary working needs.

It is important becasue these preventive and remedial measures are intended to accommodate early administrative intercession to address issues before bankruptcies become inescapable, subsequently limiting the number and unfavorable effect of insolvencies.

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