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
Method of pricing property and liability insurance. It uses charges and credits to modify a class rate based on the special characteristics of the risk. Insurers have been able to develop a ...
Provision in a life insurance policy that permits the policy owner to name anyone as primary and secondary beneficiaries. The policy owner may change the beneficiaries at any time by simply ...
1969 federal legislation requiring states to treat national banks, including those whose principal offices are out of state, the same way for tax purposes as they treat their own ...
Legal obligation of an individual or business because of negligent acts or omissions resulting in bodily injury and/or property damage or destruction to another party. There are no ...
Person other than the annuitant as designated by the policyholder on whose life expectancy the annuity payment is also based. ...
Continuing on an indefinite basis. ...
Form provided for an inspection report. ...
Federal regulation of the money supply through changing commercial bank reserve requirements and interest rates, thereby stimulating the economy or deflating the economy. ...
Actuarial procedure used to determine the annual rate of return at which annual benefits would have to be gained from the cash value life insurance policy in order to equal the annual ...
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