SEOUL, Jan. 11 (Yonhap) -- Insurance firms in South Korea saw their risk-based capital ratio fall in the third quarter of last year amid rising market interest rates, data showed Tuesday.
The risk-based capital (RBC) ratio of local insurance firms stood at 254.5 percent as of end-September, down 6.4 percentage points from three months earlier, according to the data from the Financial Supervisory Service (FSS).
The fall came as a rise in market interest rates and stock market declines caused losses from their asset holdings, according to the FSS.
The ratio has been trending down since it was tallied at 283.6 percent at the end of September 2020.
The RBC ratio is derived from the actual solvency capital divided by the minimum solvency capital required. It measures an insurer's ability to absorb losses and pay insurance money to policyholders.
Local insurers are required to maintain the ratio at 100 percent or above, while the watchdog advises insurance firms to have ratios of 150 percent or higher.
Insurance firms here are required to gradually increase their capital reserves to better cope with tougher global accounting standards for insurers, set to go into effect in 2022.
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