Definition of "Capacity"
Maximum that an insurance company can underwrite. The limits of coverage that a property and casualty company can underwrite are determined by its retained earnings and invested capital. reinsurance is a method of increasing the insurance company's capacity, in that a portion of the unearned premium reserve maintenance requirement can be relieved. Commissions earned are ceded, underwriting results are stabilized, and financing of the expansion of the insurer's capacity can take place.
Popular Insurance Terms
Property insurance premium rate that is applicable to a single, particular piece of property. ...
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Type of pension in which benefits may vary depending on the investment performance of the pension plan assets. Contributions are made to fund a target benefit, such as 35% of compensation, ...
Measure of policyholder interest in a variable annuity policy prior to the annuity date. This measure is similar to a unit in a mutual fund. ...
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