RBC ratio, or risk-based capital ratio, is a regulatory metric that compares an insurance company's actual adjusted capital to the minimum amount of capital required based on the risks it has assumed. The risk-based capital framework assigns factors to asset, insurance, interest rate, and operational risks to calculate a company-specific capital requirement. The RBC ratio is actual capital divided by required capital, usually expressed as a percentage. Higher RBC ratios indicate stronger capitalization relative to risk, while low ratios can trigger regulatory intervention, including company action levels and potential receivership. Although RBC is not a consumer-facing rating, it is an important tool regulators use to monitor insurer solvency.

Financial professionals and actuaries track RBC ratios as part of carrier due diligence, especially for companies that issue long-duration guarantees or significant variable and indexed products. Advisors sometimes see RBC ratio discussed in wholesaler materials or rating agency reports when evaluating carrier strength. While they rarely quote specific ratios to clients, they may reference strong capitalization and regulatory oversight as factors in selecting carriers. In times of market stress, declines in RBC ratio can prompt closer scrutiny, reinsurance changes, or capital infusions. Understanding RBC ratio helps advisors interpret news about insurer financial health and answer client questions about solvency and guaranty association protections.