Investments And Regulation
Definition of "Investments and regulation"
Life insurance:
- Bonds most state regulations permit life insurance company investments in debentures, mortgage bonds, and blue chip corporate bonds.
- Stocks(a) preferred stock investment is limited to 20% of the total stock of any one company, not exceeding 2% of a company's admitted assets; (b) common stock investment is limited to the lesser amount of 1% of the ADMITTED ASSETS or the policy owner's surplus.
- Mortgage investment is unlimited in first mortgages on residential, commercial, and industrial real estate.
- Real Estate investment is limited to 10% of admitted assets.
- DOMESTIC INSURERS and FOREIGN INSURERS must invest according to the minimum capitalization requirement in federal, state, or municipal bonds.
- Company funds in excess of minimum capitalization and reserve requirements can be invested in federal, state, or municipal bonds as well as stocks or real estate. The insurance company is limited in its investment in any one firm up to no more than 10% of its admitted assets; its real estate investment can be no more than 10% of its admitted assets.
Popular Insurance Terms
Statement regarding an insured's retention of low-severity risks because they are not catastrophic, and can be absorbed without having a dramatic effect on the financial structure of a ...
In property insurance, a stipulated agreement between the insurance company and the insured that the amount of insurance coverage under the policy is sufficient to be in compliance with the ...
Deduction allowed for gifts and bequests to a spouse for federal estate and gift tax purposes. Under the Economic Recovery Tax Act of 1981 (ERTA), the deduction became unlimited. Prior to ...
Coverage in which one premium payment is made and the policy is fully paid up with no further premiums required. ...
1890 law prohibiting monopolies and restraint of trade in interstate commerce. The Sherman Act was strengthened in 1914 with amendments known as the Clayton Act that added further ...
Agreement "of utmost good faith." Under law, it is assumed that insurance contracts are entered into by all parties in good faith, meaning that they have disclosed all relevant facts and ...
Event that results in bodily injury and/or property damage to a third party. A clause that is common to most liability insurance policies stipulates that all bodily injuries and/or property ...
Plan in which participant (employee) utilizes spending accounts to pay for health care costs not subject to reimbursement from a health insurance policy or health care provider. The ...
Automatic nonproportional reinsurance treaty or automatic proportional reinsurance treaty that provides coverage for losses upon which claims are made while the treaty is in force, without ...
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