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 for musicians and other providers of musical services such as musical instrument dealers. Musical instruments, service equipment, and sheet music are insured on an all risks basis ...
Health insurance coverage for miscellaneous medical expenses associated with a hospital stay. Benefits provided in individual and group health insurance include ambulance service to and ...
Single policy under which individuals in a natural group (such as employees of a business firm) and their dependents are covered. ...
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Application for a policy, in life insurance, accompanied by the first premium; in property and casualty insurance, the insurance application itself. ...
Clause in a bond that permits a principal who was formerly insured by the bond to report a loss to the surety company that occurred while the bond was in force. The period of time for ...
Kindling intentionally set in a fireplace, stove, furnace, or other containment that has not spread beyond it. Property insurance does not protect against damage from a friendly fire. For ...
Correction of a contract containing a mistake in order to prevent a party to that contract from gaining from that mistake. For example, if $1,000,000, instead of the correct amount of ...
Extension of coverage available under the Standard Fire Policy. The standard policy only covers the perils of fire and lightning. The endorsement covers riot, riot attending a strike, civil ...
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