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Credit FAQ: Next Steps For Proposed Insurer Risk-Based Capital Adequacy Methodology

Updated Note as of May 3, 2022: We recently completed the Request for Comment (RFC) period for our proposed criteria to determine risk-based capital adequacy for insurance entities. Final approval of new criteria requires completion of multiple steps beyond the RFC process. In the next phase of our criteria development process, we will review the comments submitted during the comment period and consider whether further changes are merited. Our criteria development process is focused on analytical quality and our policies and procedures provide a framework that supports our analysts in operating independently of commercial considerations and influence.

On Dec. 6, 2021, S&P Global Ratings published a request for comment (RFC) on proposed changes to its risk-based capital adequacy methodology for insurers and reinsurers (see "Request For Comment: Insurer Risk-Based Capital Adequacy--Methodology And Assumptions").

We continue to encourage interested market participants to submit their written comments on the proposed criteria by April 29, 2022, to, where participants must choose from the list of available Requests for Comment links to launch the upload process (you may need to log in or register first).

The proposed criteria incorporate analytical changes that are intended to improve our ability to differentiate risk, enhance the global consistency of our methodology, improve the transparency and usability of our methodology, and account for more recent data and experience since our last update of the insurance capital model criteria. Since publishing the RFC, we have made various information available to help market participants better understand the proposed criteria (see "Related Research").

Given broad interest in the proposed criteria, we also wish to provide the market with information regarding the next steps in our criteria development process. At present, we expect to finalize the proposed criteria no sooner than late in the third quarter of this year, but we will provide updates to market participants if our expectations change.

Frequently Asked Questions

Does the end of the comment period mean that the proposed criteria become final and effective on that date?

No. The expiration of the comment period is not the end of our criteria development process; it simply triggers the commencement of the next phase, which is a period of detailed review and further consideration.

What happens to proposed criteria after the end of the comment period?

We will review the comments submitted during the comment period and consider whether further changes are merited to the proposed criteria based on the feedback received. As a result of that exercise, we may propose additional changes to the proposed criteria.

How long does it typically take for proposed criteria to become final following the close of a comment period?

The amount of time it takes for proposed criteria to be finalized following the close of an RFC period can vary depending on the complexity of the criteria proposal, as well as the extent and nature of the feedback received, among other factors. In this case, we expect to finalize the proposed criteria no sooner than late in the third quarter of this year. We will update market participants if our expectations change.

After the comment review process, including the adoption of any additional proposed changes, how and when does the proposed criteria become final and effective?

Pursuant to our criteria development process, final approval of a new criteria article requires completion of multiple steps beyond the RFC process. First, once the drafting process has been completed, the draft criteria must be reviewed by our independent criteria validation function. Following this step, the draft criteria would then need to be reviewed and approved by two committees, first our Criteria and Models Governance Committee and then the Criteria & Models Committee of the S&P Global Ratings U.S. Board of Managers. Only after those steps are completed and approvals are obtained can the proposed criteria be finalized and become effective.

Once the comment review and formal approval processes have been completed, how do you communicate that new criteria have become effective?

Finalized criteria typically become effective on the date the criteria article is published on our website (some countries require additional local regulatory steps be completed before criteria become effective in those jurisdictions).

When we publish the final criteria, we also publish the comments received during the comment period and a document called an RFC process summary. This latter document provides information to the market about the types of substantive comments received and how we considered them in arriving at the finalized criteria. Comments made during the comment period will be posted at

Related Research

This report does not constitute a rating action.

Analytical Contacts: Ali Karakuyu, London + 44 20 7176 7301;
Carmi Margalit, CFA, New York + 1 (212) 438 2281;
Methodology Contacts: Mark Button, London + 44 20 7176 7045;
Ron A Joas, CPA, New York + 1 (212) 438 3131;
Matthew B Albrecht, CFA, Centennial + 1 (303) 721 4670;
Andrea Davidson-Wright, London + 44 20 7176 3736;

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