(a) In general. A supervised insurance organization must determine
its BBA ratio, subject to the minimum requirement set out in this
section and buffer set out in section 217.604, for each depository
institution holding company within its enterprise by:
(1) Establishing an inventory that includes
the supervised insurance organization and every company that meets
the requirements of section 217.605(b)(1);
(2) Identifying all building block parents
as required under section 217.605(b)(3);
(3) Determining the available capital and
capital requirement for each building block parent in accordance with
its indicated capital framework;
(4) Determining the building block available
capital and building block capital requirement for each building block,
reflecting adjustments and scaling as set out in this subpart;
(5) Rolling up building
block available capital and building block capital requirement amounts
across all building blocks in the supervised insurance organization’s
enterprise to determine the same for any depository institution holding
companies in the enterprise; and
(6) Determining the ratio of building block
available capital to building block capital requirement for each depository
institution holding company in the supervised insurance organization.
(b) Determination
of BBA ratio. For a depository institution holding company in
a supervised insurance organization, the BBA ratio is the ratio of
the company’s building block available capital to the company’s
building block capital requirement, each scaled to the common capital
framework in accordance with section 217.606.
(c) Minimum capital requirement. A
depository institution holding company in a supervised insurance organization
must maintain a BBA ratio of at least 250 percent.
(d) Capital adequacy.
(1) Notwithstanding the minimum requirement
in this subpart, a depository institution holding company in a supervised
insurance organization must maintain capital commensurate with the
level and nature of all risks to which it is exposed. The supervisory
evaluation of the depository institution holding company’s capital
adequacy is based on an individual assessment of numerous factors,
including the character and condition of the company’s assets
and its existing and prospective liabilities and other corporate responsibilities.
(2) A depository institution
holding company in a supervised insurance organization must have a
process for assessing its overall capital adequacy in relation to
its risk profile and a comprehensive strategy for maintaining an appropriate
level of capital.
