TITLE
"Solvency Regulation Through Risk-Based Capital and Risk-Based Guaranty Fund Premiums: An Analysis of Incentive Effects," Journal of Insurance Issues,  David W. Sommer. Fall 1996, Vol XIX, No. 2, pp. 94-106.

ABSTRACT
The insurance regulatory community has become increasingly interested in recent years in the issue of insurance company solvency. In response to concerns about industry solvency, the National Association of Insurance Commissioners has implemented risk-based capital systems for both the life-health and property-liability insurance industries. Risk-based guaranty fund premiums also have been suggested by some as an alternative to risk-based capital. The purpose of this paper is to analyze the differing incentive effects of risk-based capital requirements and risk-based guaranty fund premiums, and to suggest that a combination of the two ideas could be the most effective way to achieve a high level of industry safety with minimum market distortions.