General insurance Solvency margin

[Mataracy]

I will like to explain what solvency margin means.

In respect of general business, an insurer at, at all times maintain a margin of solvency which is the excess of its admissible assets over liabilities consisting of reserves for unexpired risks, reserves for outstanding claims, reserves for claims incurred but not yet reported, and funds to meet other liabilities.
The solvency margin should not he less than 15% of gross premium income of the company less reinsurance premium paid out during the year under review or the minimum paid -up capital, whichever is greater.

For the purposes of calculating the solvency margin, all moneys owned by policyholders, brokers or agents by way of premium due yo but not received by the insurer as at the end of the relevant year shall not count as admissible assets .

According to the law Failure to comply with the solvency margin levels within a stipulated period of time could constitute a good ground for the cancellation of the registration of the insurer.

You can equally contribute what you know or idea that you have about this also and it will be helpful.

 

[Jamoflondon]

I love the explanation you made in your post, in fact it is a great opportunity ti gain from the knowledge you just shared. I really do not know about it or never have heard of it but you wrote that and it means so much to me because I really learned from it

 

[Mandy96]

You are actually right on this analysis, actually I can’t lie that this is my first time hearing about solvency margin but the truth is that I really do not understand it until I just read it on your post. I am really excited to have this opportunity to know about it

 

[btaliat]

I can only explain based on your explanation. This is because I don't have any prior knowledge on this topic before your post. I think this solvency margin can be used as well to determine the score credit of an insured person. I will like if you can enlighten more on it.

 

[Phabbyfundz]

The importance of insurance companies cannot be overemphasized, and in insurance or insurance policy transactions they are a lot of things things the insurers and insurance companies take it consideration before approving or deeming any fit to purchase or own the said insurance policy and this also determines the type of premium plan the insurer would give to the policy Holder.