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Equalization Reserve

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Equalization Reserve
An account where an insurance company deposits funds to use in an emergency. That is, if an insurer finds itself in a position where it needs to pay more claims than it had anticipated, it may use funds from the equalization reserve to ensure that it fulfills its contractual obligations. An equalization reserve helps prevent any potential cash flow problems for the insurance company. It is especially useful in the event of an act of God, such as a flood or fire, where many policyholders live in the affected area. See also: Rainy day fund, Emergency fund.


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Equalization reserve is required for other natural catastrophes.
Luxembourg Rent-a-Captive Reinsurance for clients looking to equalize group deductibles or in certain cases to build up equalization reserves on a more long-term basis About Aon Aon Corporation ( http://www.
95 billion in 9/11 claims, Swiss Re says it will use about Sfrl billion from its equalization reserves.
 
 
 
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