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Adjusted Net Worth

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Adjusted Net Worth
A way to measure the value of an insurance company. It is calculated by taking its net worth and adding its paper gains, capital surplus, and any other reserves the company may have set aside. The adjusted net worth represents a way for one to compare the financial health of an insurance company to that of other insurance companies.


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Recommendation: In order to minimize the potential for fraud and abuse in the 8(a) program, the Administrator of SBA should evaluate changing program regulations to require adjusted net worth or total asset calculations to include assets held by the spouses of 8(a) participants.
For example, it is customary for merger and acquisitions (M&A) transactions to contain post-closing adjustments to protect both the buyer and seller from any material differences between the expected levels of adjusted net worth and the actual level at closing.
Adjusted net worth Title I and Title II nonsupervised lenders and loan correspondents must meet FHA net worth requirements.
 
 
 
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