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
Hospital insurance program that provides medical professional liability insurance coverage to non employed hospital physicians. The objective of this means of insurance coverage is to ...
Coverage for negligent acts or omissions of an operator of a motel or hotel resulting in bodily injury to guests and damage or destruction of a guest's property. ...
Financial incentives credited to the policy to encourage the policyowner to keep the policy in force. The incentives may be utilized by: (1) applying them to the policy cash value after a ...
Income paid under a disability policy that is not covered under workers compensation benefits. It is usually expressed as a percentage of the insured's income prior to the disability, but ...
Bureau insurer that files its statistical and underwriting experience with a rating bureau. ...
Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile. The personal automobile policy (PAP) and the business automobile policy (BAP) cover ...
Sums payable to the winning plaintiff by the losing defendant in a court of law; can take any or all of these forms: general, punitive, and special. ...
Purchasing bond investments that mature at different time intervals. ...
Describing the time of payment of face amount (face of policy) upon the death of the insured, or when the cash value in an endowment insurance policy equals the face amount. ...
Have a question or comment?
We're here to help.