- A reserve of money set aside by an insurance company for liabilities arising from claims that have occurred but have yet to be settled. Reserves are also set aside for estimated future liabilities. Also known as an "outstanding claims reserves", a "statutory reserve", an "equalization reserve", or an "insurance reserve."
insurance loss reserve, insurance claim reserve
Related Terms and Acronyms
- Bank Reserves — Definition,
- Banks' holdings of deposits.
- Claims Adjuster — Definition,
- An individual who ascertains the insurer's liability after an insurance claim has been made.
- Conditional Reserves — Definition,
- Reserves that are considered liabilities.
- Exposure — Definition,
- How much liability an insurer takes on when they write an insurance policy.
- General Account (GA) — Acronym, Very Important,
- Investments and assets that an insurer uses for paying benefits and claims.
- Incurred But Not Reported (IBNR) — Acronym,
- An estimate of how much an insurance company owes to policyholders for losses that have already occurred but have not yet been reported.
- Insurance Claim — Definition,
- An application for benefits made by an insurance policyholder after an insured event.
- Insurance Proceeds — Definition,
- The benefits received by an individual after a claim has been verified.
- Legal Reserve — Definition,
- The legally mandated minimum amount of money an insurer must keep liquid in order to satisfy its obligations to policyholders.
- Liquid Assets — Definition,
- Cash and other property that can be converted quickly and easily into cash.
- Loss — Definition,
- When expenses are larger than revenues.
- Loss Adjustment Expenses (LAE) — Acronym,
- Expenses incurred by loss adjusters when they investigate and settle claims.
- Losses Incurred — Definition,
- The total net losses of an entity in a year.
- Reserve — Definition,
- Money retained for some future use.
- Statutory Liability — Definition,
- Liability that is assigned by law and is not open for interpretation.
- 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.