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
mandatory reserve, mandated reserve, compulsory
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.
