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