Legal Reserve

Definition

  • The minimum amount of money an insurance company must hold in reserve to satisfy claims and obligations, as necessitated by law.

Synonyms
mandated reserve, compulsory, mandatory reserve

Related Terms and Acronyms

  • Bank Reserves Definition,
    • Banks' holdings of deposits.
  • General Account (GA) Acronym, Very Important,
    • Investments and assets that an insurer uses for paying benefits and claims.
  • Insurance Claim Definition,
    • An application for benefits made by an insurance policyholder after an insured event.
  • Loss Reserve Definition,
    • A reserve of money and liquid assets set aside by an insurer for the payment of claims that have been submitted but have yet to be paid out.
  • Statute Definition,
    • A law established by an act of the legislature.
  • Total Admitted Assets Definition,
    • What assets an insurance company is legally allowed to include when determining its financial solvency.
  • Valuation Reserve Definition,
    • A financial reserve kept by an insurer in case a liability is larger than expected or an insurer's investments or assets are overvalued.
  • Voluntary Reserve Definition,
    • A reserve kept by an insurer for future claims that is larger than is required by government regulations.
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