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Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
38% - Moderately

Valuation Reserve

Synonyms:buffer, overcompensate, set-aside, stockpile
Filed Under: insurance
Tags: insurance

Definition of valuation reserve

valuation reserve
1. A reserve kept by insurance companies, and required by law, that is used to act as a contingency in case the insurer's investments are overvalued or if a liability turns out to be larger than expected.

Related Terms and Acronyms:

  • bank reserves   Banks' holdings of deposits.
  • legal reserve   The legally mandated minimum amount of money an insurer must keep liquid in order to satisfy its obligations to policyholders.
  • loss reserve   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.
  • total admitted assets   What assets an insurance company is legally allowed to include when determining its financial solvency.
  • voluntary reserve   A reserve kept by an insurer for future claims that is larger than is required by government regulations.

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