Best's Capital Adequacy Relativity - BCAR Law and Legal Definition

Best's Capital Adequacy Relativity (BCAR) is a percentage that measures a company's relative capital strength compared to its industry peer composite. A company's BCAR is an important component in shaping the appropriateness of its rating, is calculated by dividing a company's capital adequacy ratio by the capital adequacy ratio of the median of its industry peer composite using Best's proprietary capital mode. Capital adequacy ratios are calculated as the net required capital necessary to support components of underwriting, asset, and credit risks in relation to economic surplus.