OFHEO GUIDELINE 410 
Title:  Risk Based Capital - Frequently Asked Questions (FAQs) 
for Risk Based Capital Operations

Approved By: Armando Falcon, Jr.  Date: November 7, 2002
 
I. PURPOSE: 
FAQs are used for two purposes: 
  To publicly communicate forthcoming Risk Based Capital (RBC) Rule 
technical corrections, RBC Report Instruction amendments, and software 
operating instructions modifications in advance of publication of updated 
documents. 
  To add contextual or explanatory detail that may assist users of the RBC 
Rule, RBC Report Instructions, and software operating instructions. 
Answers to FAQs can be relied upon as an accurate and reliable representation 
of OFHEO policy for purposes of determining the Enterprises Risk Based capital 
classification and data provisioning processes. 
II. Scope: 
The policy set forth in this guideline applies to OFHEO employees and 
contractors. Operating procedures are outlined in the Appendix to this guideline. 
The Director of OFHEO or his/her designee has the discretion to alter any of the 
procedures set forth within this guideline. 
III. Authority And References: 
12 U. S. C. 4611. 
Change Management Control Board (CMCB) Charter. 
IV. Effective Date: 
These guidelines are effective upon approval by the Director of OFHEO. 
Implementation dates for specific FAQs will adhere to the Change Management 
Cycle determined by the Change Management Control Board and detailed in 
OFHEO Guideline 409. V. Policy: 
FAQs clarify, or amplify information contained in the RBC Rule (or technical 
amendments), the RBC Report Instructions, or any public technical 
documentation developed to facilitate the installation, use, and maintenance of 
the related software. FAQs can also serve to notify the public about a 
forthcoming technical rule change. FAQs relate only to subject matter that is 
already addressed in another public source and are not used to make 
amendments to the RBC Rule. Additionally, FAQs do not contain information 
proprietary to any entity, and are of a scope that is broad enough to be of use to 
more than a single party or organization. 
OFHEOs CMCB reviews FAQs for approval. The Proprietary Information Review 
Group (PIRG) reviews FAQs for proprietary information. Once approved, the 
FAQs are posted on OFHEOs web site under the appropriate heading(s) and 
communicated to the Enterprises through the guidelines for SCRs as outlined in 
OFHEO Guideline 408. FAQs used to amend other documents prior to the 
publication of document revisions will remain available on the web site until the 
revised document is published. FAQs used to provide additional detail not found 
in other published sources will remain posted on the web site as long as 
necessary. Periodically, the CMCB will review posted FAQs to determine the 
appropriateness and relevance of the posting. 
VI. Responsibilities: 
All OFHEO offices  Receive external queries relating to the RBC Rule or 
otherwise identify a need for an FAQ. 
Office of General Counsel (OGC)  As appropriate, provide subject matter 
expertise to research the identified FAQ issue and prepare the FAQ Systems 
Change Request. Review all draft FAQs prior to submission to the CMCB for 
approval. 
Office of Information Technology (OIT)  As appropriate, provide subject 
matter expertise to research the identified FAQ issue and prepare the FAQ 
Systems Change Request. 
Office of Policy Analysis and Research (OPAR)  As appropriate, provides 
subject matter expertise to research the identified FAQ issue and prepare the 
FAQ Systems Change Request. Office of Risk Analysis and Model Development (ORAMD) 
 As appropriate, provides subject matter expertise to research the identified FAQ 
issue and prepare the FAQ Systems Change Request. 
Chair of the Change Management Control Board (CMCB Chair) or 
Designee  Assigns topics identified for FAQs to the appropriate Office and/or 
staff member for analysis and research. 
Office of External Relations (OER)  Review all draft FAQs prior to 
submission to the CMCB for approval. Control public access to the FAQs by 
posting and removing FAQs from OFHEOs public web site, as directed by the 
CMCB. 
Change Management Control Board (CMCB)  Evaluate all proposed FAQs 
and approve for publication as appropriate. Periodically review FAQs posted on 
OFHEOs public web site to determine the appropriateness of the posting. Direct 
OER in the posting and removal of FAQs. 
Proprietary Information Review Group (PIRG)  Review all FAQs prior to 
distribution to address issues relating to Enterprise or OFHEO proprietary 
information. 
VII. Definitions: 
FAQs  Frequently Asked Questions references both the question and the answer 
when published by OFHEO. 
VIII. Types of Records Created or Received: 
  System Change Requests 
  FAQs 
Appendix 
OFHEO Procedures for FAQs 
Overview 
To facilitate the use and understanding of the Risk Based Capital Model, OFHEO has 
elected to provide additional documentation across a variety of very specific topics. 
This documentation will be in the form of questions accompanied by detailed answers, 
and will be collectively referred to as Frequently Asked Questions, or FAQs. Topics 
may be based on questions or recommendations received from outside of OFHEO, or 
may be submitted from within OFHEO. The FAQs do not have to be based on actual 
questions received, but may be created in anticipation of such questions. 
FAQs exhibit three primary characteristics: 
 FAQs clarify or amplify information contained in the Risk Based Capital Rule (or 
related amendments), the Risk Based Capital Report Instructions, or any public 
technical documentation developed to facilitate the installation, use and 
maintenance of the related software. In some instances, an FAQ may be used to 
notify the public about a forthcoming technical rule change. Information relating to 
Technical corrections will be published periodically in the Federal Register as 
amendments to the RBC rule. FAQs may not be used to communicate RBC rule 
changes, which are more properly the subject of notice and comment rulemaking. 
 FAQs relate only to subject matter that is already addressed in another public 
source. 
 FAQs do not deal with any proprietary information, and are of a scope that is broad 
enough to be of use to more than a single party or entity. 
Process 
The process for developing, approving and implementing FAQs is as follows: 
1. The topic or question will be submitted for consideration to the Office of General 
Counsel (OGC), the Office of Information Technology (OIT), the Office of Policy 
Analysis and Research (OPAR), or the Office of Risk Analysis and Model 
Development (ORAMD). (These Offices are the most likely to receive external 
inquiries relating to the rule, or to identify internally a need for a FAQ). 
2. Once received, the topic will then be forwarded to the Chair of the Change 
Management Control Board (CMCB) who will assign the topic to the appropriate 
office for analysis and research. The analysis must include a determination that 
the issue meets the FAQ characteristics noted above, and that publication of a 
FAQ is an appropriate means to address the issue. The results of this analysis 
must be included with the FAQ (but not necessarily incorporated in the body of 
the FAQ) when it is submitted for approval. 
3. If the topic has the requisite characteristics, the subject matter expert(s) will 
develop a complete FAQ. The subject matter expert must indicate the section(s) 
of the related document(s) to which the FAQ relates, including other System 
Change Requests or Form 40 (for proposing a technical amendment) and must 
further indicate if the FAQ is: 
a. providing an interim amendment to existing documentation until 
the documentation is formally amended and published; 
b. providing explanatory detail that will not be included in the existing 
documentation; or 
c. both. 
4. Upon completion of the draft FAQ, the subject matter expert(s) will submit the 
document to the designated OGC staff member for review of relevant legal 
issues. OGC shall determine whether to include additional language that notifies 
the public that a particular FAQ contains information that may be the subject of a 
technical amendment to the RBC rule. In those instances where such additional 
language is indicated, the following clause will be added to the text of the FAQ: 
 This FAQ contains in ormation that will be the subject of a 
technical amendment to the (insert section) RBC rule. The 
reader is advised to check the Federal Register and OFHEOs 
web site www.OFHEO.gov periodically, to determine the 
issue date of the technical amendment. 
5. Concurrent with submission of the draft FAQ to OGC, the subject matter 
expert(s) will submit the document to the designated Office of External Relations 
(OER) staff member for review. The draft FAQ shall also be submitted to the 
Proprietary Information Review Group (PIRG) to address any issues related to 
the use of Enterprise or OFHEO proprietary information. 
6. Upon completion of review by OGC, OER, and the PIRG, the document will be 
submitted to the CMCB via a Systems Change Request (SCR). In addition to the 
FAQ text, the preparer must include the following additional elements: 
a. The analysis performed to determine that an FAQ is an appropriate means 
for addressing the issue. 
b. An indication that sign-off has been obtained from OGC, OER, and the 
PIRG. 
c. Identification of any document(s) and specific section(s) relevant to the 
SCR. 
d. Copies of SCRs (or Form 40s for Technical Corrections to the Rule) to 
formally amend the existing documentation, if applicable. 
e. In cases where the FAQ provides explanatory detail, a representation that 
an affirmative determination has been made that the text of the FAQ does 
not contradict any information contained in any of the existing 
documentation sources relating to the Risk Based Capital Rule. 
7. The CMCB will review and discuss the proposed FAQ and will vote on whether or 
not to approve. 
8. If approved, the FAQ will be made publicly available by OER, upon completion of 
appropriate web site clearance procedures, on OFHEOs public web site. 
9. If the FAQ is not approved, the CMCB will indicate to the preparer the concerns, 
and provide guidance as to whether or how the FAQ should be modified and 
resubmitted. 
Maintenance 
After each amendment to the Risk Based Capital Rule, changes to the RBC Report 
Instructions, or modification to the RBC software technical instructions, the CMCB will 
review the published FAQs to determine if they require modification or elimination, and 
notify OER as necessary. Report Instruction Amendments 
In determining whether an amendment to the RBC Report Instructions requires interim 
publication via a FAQ, the preparer should consider the extent to which the amendment 
will affect the way the Enterprises prepare their quarterly submissions, and the timing 
of the next update to the Report Instructions. For example, an amendment to the 
Report Instructions that changes the field length for an existing text data field (such as 
the OFHEO ledger code description) generally will not warrant a FAQ because of the 
minimal impact on the Enterprises submission process and on the calculation of their 
capital requirements. 
Similarly, if revised Report Instructions will be published before the Enterprises begin 
preparing their next data submission, FAQs highlighting amendments incorporated into 
the Report Instructions will not be necessary. 

(Date:  11/7/02)
(Revision:  0)