Phabbyfundz
Active member
To understand vividly insurance companies and insurance policy there are some terms we need to be conversant with and one of them is solvency.
Solvency is the insurance company or insurers ability to pay the claims of policy holder. Regulations to promote solvency includes minimum capital and surplus requirements, statutory accounting conventions, limits to insurance company investments and cooperate activities, financial ratio tests and financial data disclosure.
Insolvency is the insurers in ability to pay debts. Insurance insolvency standards and the regulatory actions taken vary from state to state. When the regulators deem an insurance company is in danger of becoming insolvent they can take one of these three actions; place the company in conservatorship or rehabilitation if the company can be saved or in liquidation if salvage is deemed impossible.
Solvency is the insurance company or insurers ability to pay the claims of policy holder. Regulations to promote solvency includes minimum capital and surplus requirements, statutory accounting conventions, limits to insurance company investments and cooperate activities, financial ratio tests and financial data disclosure.
Insolvency is the insurers in ability to pay debts. Insurance insolvency standards and the regulatory actions taken vary from state to state. When the regulators deem an insurance company is in danger of becoming insolvent they can take one of these three actions; place the company in conservatorship or rehabilitation if the company can be saved or in liquidation if salvage is deemed impossible.