Asset Valuation Reserve


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Asset Valuation Reserve

The assets that a company is required to maintain in order to pay unexpected liabilities should they arise. Banks, for example, are required to keep a reserve ratio of deposits to protect against a bank run. Likewise, insurance companies must keep an asset valuation reserve (which is set by the NAIC) to be able to pay an unusually large number of claims.
References in periodicals archive ?
Similar to the Asset Valuation Reserve, the risk-based capital formula would apply a moving two-year average ratio of company-to-industry experience in the absence of a standardized credit rating system for commercial real estate mortgages.