Reserve

Definition

  • A store of money kept aside for some future obligation. Banks must hold in reserve enough money to cover the deposits and withdrawals made by their customers, or likewise, an insurance company must keep enough money liquid in order to pay future insurance claims.

Synonyms
operating reserve, equity reserve, financial reserve

Related Terms and Acronyms

  • Bank Reserves Definition,
    • Banks' holdings of deposits.
  • Conditional Reserves Definition,
    • Reserves that are considered liabilities.
  • General Account (GA) Acronym, Very Important,
    • Investments and assets that an insurer uses for paying benefits and claims.
  • 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.
  • Premium Balances Definition,
    • A ledger kept by insurance companies recording insurance premiums.
  • Self Insurance Definition,
    • Setting aside money or assets for a potential future loss.
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