Statutory Earnings
Revenue based on conservative reserve requirements of various states. Statutory earnings do not meet generally accepted accounting principles (GAAP). A role of state regulation is to make certain that insurers have enough money set aside in statutory reserves to pay all future claims and that the company will remain solvent. For this reason, regulators take a conservative approach to setting reserve requirements. But because an increase in reserves translates into lower earnings for a stock insurer, investors, and securities analysts argue that they are not helpful in gauging the health of a company for investment purposes. Therefore, insurers calculate statutory earnings for regulators and another set of earnings, based on natural reserves, for investors.
Popular Insurance Terms
Coverage by at least two insurance policies providing the same coverage for the same risk. ...
Relationship between expected incurred insurance-related costs (not including claims) and expected written premiums. ...
Computation of the asset share value, surrender value, and reserve and the comparison of the three computations in order to judge the adequacy and equity of the tentative gross premium ...
Range of administrative and risk management services that can be purchased by an insured. Increasingly, insurance can be purchased unbundled so that policy-holders may pay for straight ...
Independent agent membership group, originally mutual agents but today open to both mutual and stock agents. Association views are presented both nationally and locally on insurance ...
Coverage under the Homeowners Form-4 (HO-4) for the insured's personal property and loss of use against fire and/or lightning; vandalism and/or malicious mischief; windstorm and/or hail; ...
Coverage for specialists in various professional fields. Since basic liability policies do not protect against situations arising out of business or professional pursuits, professional ...
Bureau insurer that files its statistical and underwriting experience with a rating bureau. ...
Regulation named after a former Superintendent of Insurance of New York State, and instituted in the early 1900s. It requires every insurer admitted to New York to comply with the New York ...
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