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 Posted: Mon Nov 10, 2008 5:41 am Post subject: kindly give sample of solvency margin |
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| list of the adminsible assets and adminsible liabilities |
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ebikiokpomu
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| Posted: Mon Nov 10, 2008 9:50 pm Post subject: |
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Have no idea what you are talking about...what is "adminsible? Never heard of it...are you referring to "admissable?" As well, what are you getting at here? Could you be a bit more specific as to what you're looking for information on?
Thanks!
InsTeacher  |
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InsTeacher
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| Posted: Tue Nov 11, 2008 10:24 am Post subject: |
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| I think the term is commonly used in UK. Solvency Margin is the amount that the insurance companies are required to maintain over and above their liability amount. This is done in order to minimize the probability of liquidation amongst the insurance companies. And, I think this amount is decided by the insurance regulatory authority of the respected country. |
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JeremyHolter
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| Posted: Wed Nov 12, 2008 2:57 am Post subject: |
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OK...I've always referred to this as "capitalization requirements" or "insurer solvency" requirements, and if I would have read the header to the post, I actually would have seen that! 
Every insurer is required to undergo a thorough examination of its books and records by the state insurance department, and most states require this examination at least once every five years. This reports are public records, and you should be able to go to your (or any) states' insurance department online and find out not only examples, but specifics.
You'll run into weird acronyms, such as "IBNR" (incurred but not reported- has to do with losses and claims stuff) and "12-month moving LR" (12-mo. moving loss ratio) and stuff like that. So, if you can get through the insurance mumbo-jumbo, they're chock full of information.
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InsTeacher
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| Posted: Wed Nov 12, 2008 12:02 pm Post subject: |
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Yes, and to say the same thing a different way many insurance companies express this as Capital and Surplus.
Many times this is stated a percentage of total assets minus liabilities.
For a simplistic example:
If you had $100,000 of debt (liability) but also had $120,000 cash (asset) you could state your Capital Surplus is 20%.
Meaning you have the financial ability to meet all of your debt obligations and still have 20 cents on the dollar left over.
The higher the Capital and Surplus ratio the more solvent the company.
See THIS from A.M. Best.
| Quote: | | Capital - Equity of shareholders of a stock insurance company. The company's capital and surplus are measured by the difference between its assets minus its liabilities. This value protects the interests of the company's policyowners in the event it develops financial problems; the policyowners' benefits are thus protected by the insurance company's capital. Shareholders' interest is second to that of policyowners. |
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| Quote: | | Surplus - The amount by which assets exceed liabilities. |
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GarySpicuzza
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