The condition of being insolvent; the state or condition of a person who is insolvent; the condition of one who is unable to pay his debts as they fall due, or in the usual course of trade and business; as, a merchant's insolvency.
(1) The inability of a business organization to pay its financial obligations as they come due. (2) For an insurer, the inability to maintain capital and surplus above the minimum standard of capital and surplus required by law.
In the case of insurance, insolvency means that companies do not have sufficient funds in their reserves to pay claims. If a company appears to be at risk for insolvency, the Texas Department of Insurance (TDI) will advise the company to take measures to increase their reserve funds. These measures can include such things as raising rates, adjusting the company's investment portfolio, and soliciting investment in the company. If the company fails to improve its situation, the TDI can intervene by court order and take control of that company's operations. If all else fails, the final step is liquidation. Using this last resort, the TDI will dissolve the company and sell off all of its assets to pay the claims.
Insolvency is a general term used for the inability of an individual or company to pay debts that it owes. When referring to an individual the legal process is called bankruptcy, and regarding a company it is called liquidation. Both forms of insolvency involve the redistribution of the individual or company's assets to the people or creditors that they owe. Insolvency does not always lead to bankruptcy or liquidation if the party involved has enough assets to resolve the matter, but it generally does.
A financial condition in which a taxpayer's total liabilities (debts owed) exceed the total fair market value of all his or her assets (cash and other property). A taxpayer is insolvent to the extent his or her liabilities exceed his or her assets.
Deciding whether an insurer is insolvent, i.e., unable to pay it debts, is far from simple, partly because the insurance company solvency standards vary from state to state, and partly because the adequacy of reserves to pay future claims is a matter of opinion.
A company is insolvent when it is unable to pay its debts as and when they fall due. Arises when, for instance, judgement debts remain unsatisfied or cheques are returned unpaid by the company's bankers. A company is also insolvent when its liabilities, including contingent and prospective liabilities, exceed the value of the assets.
Technically, the financial condition of an enterprise whose liabilities exceed its assets, or which is unable to pay its debts as they mature. Financing an insolvent client requires specialized lending expertise, particularly if insolvency leads to bankruptcy. Bankruptcy tends to be the path followed by insolvent companies, but it may actually open up alternative financing opportunities.
the state of a firm when its liabilities, excluding equity capital, exceed its assets; a less stringent definition would be that a firm is insolvent if it is unable to meet its obligations when due for payment. assets liabilities economics & business
Inability to pay debts. A 2000 EU regulation is aimed at governing the liquidation of an insolvent debtor's assets, and preventing debtors from moving assets to another State to avoid payment. . (See Judicial-civil: Insolvency)
A company is insolvent if it doesn't have enough assets to pay its debts as they fall due. An individual is insolvent if he or she is unable to discharge his or her debts as they fall due. An insolvent company goes into administration, administrative receivership or liquidation. An insolvent person becomes bankrupt. A company never goes bankrupt in the UK, although this term is used in the United States.
Businesses are placed into insolvency when they are unable to pay creditorsâ€(tm) debts in full after realisation of all their assets. The decision to place a business into insolvency is normally taken by the creditors of a business â€“ usually a bank. There are several different forms of insolvency â€“ the main ones being administration, receivership and liquidation.
Insolvency refers to a state of financial affairs whereby the liabilities of an individual or a business exceed their assets, rendering the individual or business unable to meet their financial obligations. It is important to note that insolvency is a state of affairs and not a legal condition, as is the case with sequestration or liquidation (see Judgment).
The state of being unable to pay ones debts as they arise. There are special provisions of the Companies Acts which make it dangerous to deal with an insolvent Company. For example, a floating charge created within 12 months prior to a windingup, will be partially invalidated if at the time it was given the Company was insolvent.
The condition of a person or business that is insolvent; inability or lack of means to pay debts. Such a relative condition of a person's or entity's assets and liabilities that the former, if all made immediately available, would not be sufficient to discharge the latter.
The inability to pay one's debts as they mature. Even though the total assets of a business might exceed its total liabilities by a wide margin, that business is said to be insolvent if the assets are such that they cannot be readily converted into cash to meet the current obligations of the business as they mature.
Insolvency means being unable to pay your debts. For a company, this essentially means that there is a deficit in your balance sheet; your tangible assets are less than your liabilities, and your business does not generate sufficient surplus revenue to fill the gap. If you have surplus assets in your balance sheet but are making losses, you become insolvent when the losses will consume the surplus assets. Solvency is measured in the context of voluntary winding-up and similar procedures when the directors can declare that the company will be able to pay its debts as they fall due for the next twelve months.
(see also bankruptcy and failure) another term used to describe a firm that is failing; generally it means that a firm's liabilities exceed its assets or that it is unable to satisfy its obligations as they come due.
Insurer's inability to pay debts. Insurance insolvency standards and the regulatory actions taken vary from state to state. When regulators deem an insurance company is in danger of becoming insolvent, they can take one of three actions: place a company in conservatorship or rehabilitation if the company can be saved or liquidation if salvage is deemed impossible. The difference between the first two options is one of degree â€“ regulators guide companies in conservatorship but direct those in rehabilitation. Typically the first sign of problems is inability to pass the financial tests regulators administer as a routine procedure. (See Liquidation, Risk-based capital )
Insolvency is a financial condition experienced by a person or business entity when their assets no longer exceed their liabilities, commonly referred to as 'balance-sheet' insolvency, or when the person or entity can no longer meet its debt obligations when they come due, commonly referred to as 'cash-flow' insolvency. The term is often incorrectly used as a synonym for bankruptcy, which is a distinct concept, except in Germany.
A legal term referring to a situation in which a company has sought protection against creditors to reorganize or dissolve its operations. Most accounts receivable insurance policies cover losses arising from all legal definitions of insolvency.