South Korean insurance companies' financial health worsened in the fourth quarter of last year from three months earlier on strict regulations for loss reserves amid a low interest rate trend, the financial watchdog said Tuesday.
  

The risk-based capital ratio of 56 life and nonlife insurers averaged 292.3 percent at the end of December, down 13.5 percentage points from the previous quarter, according to the Financial Supervisory Service.  
  

The RBC ratio measures an insurer's ability to absorb losses and pay insurance to policyholders, and is the key gauge of financial stability. Local insurers are required to maintain an RBC ratio of 100 percent or above.
  

The figure had risen for three consecutive quarters since the last three months of 2013, starting from 278.4 percent and peaking at 305.7 percent in the third quarter of last year.
  

Life insurers posted 310.4 percent on average in the quarter through December, with that of nonlife organizations standing at 256.3 percent.
  

The on-quarter decline came as insurers had to secure additional required capital of 2.4 trillion won ($2.2 billion) against potential losses as financial authorities tightened standards for interest rate risks amid a low-rate trend, the FSS said. (Yonhap)