The amount of funds or assets necessary for a company to have at any given time to enable it, with interest and premiums paid as they shall accure, to meet all claims on the insurance then in force as they would mature according to the particular mortality table accepted. The reserve is always reckoned as a liability, and is calculated on net premiums. It is theoretically the difference between the present value of the total insurance and the present value of the future premiums on the insurance. The reserve, being an amount for which another company could, theoretically, afford to take over the insurance, is sometimes called the reinsurance fund or the self-insurance fund. For the first year upon any policy the net premium is called the initial reserve, and the balance left at the end of the year including interest is the terminal reserve. For subsequent years the initial reserve is the net premium, if any, plus the terminal reserve of the previous year. The portion of the reserve to be absorbed from the initial reserve in any year in payment of losses is sometimes called the insurance reserve, and the terminal reserve is then called the investment reserve.
With respect to level premium life insurance, the combined funds held by the company for all policies which, together with future premiums and interest earnings, are sufficient to meet all future claims. (See also: active life reserve.)
( provisions) Insurance companies are required to hold sums of money in special accounts, as required by law, to cover estimates of all outstanding reported losses (loss reserves) and portions of each premium which relates to the unexpired period of insurance (unearned premium reserve). The object of these reserves is to protect the insuring public against any possible financial loss.
an amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
An amount set aside by the insurer to meet future obligations. The amount of reserve varies with different types of claims, as well as with differences in severity of claims.
Money set aside and invested by insurance companies to pay estimated future losses. A company's claim department typically specifies a reserve amount for every claim filed, which may be modified as the claim proceeds.
The combined funds held by an insurance company which, together with future premiums and an assumed rate of interest, will be available to pay all contractual obligations as they fall due.
Account used to earmark a portion of equity or fund balance to indicate that it is not available for expenditure. An obsolete term in the United States. More commonly used in Europe.
something kept back or saved for future use or a special purpose
hold back or set aside, especially for future use or contingency; "they held back their applause in anticipation"
give or assign a share of money or time to a particular person or cause; "I will earmark this money for your research"
a thing put aside for future use, an extra stock or amount that one might need later
Funds set aside by an organization to cover liability for future claims under its self-insurance program. PureShare ActiveMetrics, a proactive metrics management application, helps monitor risk exposure based on metrics such as reserve funds.
Funds not appropriated for expenditure, which are set aside in a reserve account for future use.
The amount required to be carried as a liability on an insurer's financial statement to provide for future commitments under policies outstanding.
A fund set aside to meet some future obligation, a loss fund for example. More specifically, with insurance, it is the amount of a loss which has not yet been paid.
A portion of a merchant's funds in his merchant account that are held by the merchant account provider as security for future contingencies, including chargebacks. Usually only required from certain high-risk merchants.
(1) An amount representing liabilities kept by an insurer to provide for future commitments under policies outstanding. (2) An amount allocated for a special purpose. A reserve is usually a liability and not an extra fund.
An element of the battalion or higher unit held initially under the control of the commander as a maneuvering element to influence future action.
(in the context of third-party credit card processors) A percentage of your income that's temporarily held back in case of future returns, refunds, or chargebacks.
(1) An amount representing actual or potential liabilities kept by an insurer to cover obligations to policyholders and third-party claimants. (2) An amount allocated for a special purpose. Note that a reserve is usually a liability and not an extra fund. On occasion, a reserve may be an asset, such as a reserve for taxes not yet due.
An account that records a portion of the fund balance which must be segregated for some future use and which is, therefore, not available for further appropriation or expenditure.
On the level premium plan, the reserve represents the combined funds held by the company for all policies which, together with future premiums and interest earnings, are sufficient to meet all future claims.
An account used either to set aside budgeted revenues that are not required for expenditure in the current budget year or to earmark revenues for a specific future purpose.
The amount of money set aside to pay the potential future cost of a claim.
Liability account that identifies the amount of assets needed to pay future claims.
The amount required to be carried as a liability in the financial statement of an insurer to provide for future commitments under policies outstanding.
The amount of money an insurer holds which, with future premiums and an assumed rate of interest, will pay all contractual obligations as they fall due.
(1) An account used to earmark a portion of equity or fund balance to indicate that it is not appropriate for expenditure; and (2) an account used to earmark a portion of equity or, fund equity as separated legally for a specific future use.
An amount representing a liability of an insurer
An accounting entry that properly reflects the contingent liabilities.
An account used to earmark a portion of the fund balance as legally segregated for a specific use.
The anticipated dollar amount of our ultimate liability based on a known diagnosis during a policy year.
The funds an insurer considers should be held in respect of a particular policy, taking into account future outgo (benefit payments and expenses) and future receipts (premiums). Theoretical reserves may be calculated retrospectively or prospectively using the reserving BASIS.
The amount required to be carried as a liability in the financial statement of an insurer, a sum set aside by an insurance company as a liability to fulfill future obligations.
a name common to certain funds that are earmarked for specific purposes. Insurance examples are reserves for unearned premiums and reserves for losses in process of adjustment.
(1) An amount representing an insurer's estimate of its liabilities on future commitments under policies outstanding. (2) An amount allocated for a special purpose.
An amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders. A reserve is usually treated as a liability.