Equalization Reserve

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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The premium paid to SLIC has been protected through creation of Consolidated Claim Reserve Account (CCRA) in case of life insurance and Equalization Reserve Fund (ERF) with the provision of claw back approach in case of health insurance to safeguard unutilized premium amount.
00 billion to dividend equalization reserve from un-appropriated profits to maintain divide declarations.
With shareholder funds' and the equalization reserve at only $77 million, however, Dansk Kaution's capital base is very small relative to its $3,240 million gross exposure.
absorbed through the equalization reserve, but is unlikely to fall
capital because of equalization reserve requirements.
break-even and 3%, before equalization reserve movements.
The combined ratio will average 105%, with the equalization reserve protecting the capital base in years affected by major losses, Standard & Poor's said.
08 times due to higher retained earnings and an increase in equalization reserve in 2007.
WUEBA's consolidated risk-adjusted capitalisation is likely to improve prospectively through the partial retention of earnings, which benefit from the utilisation of a tax loss that has been carried forward and allocations to the equalization reserve.
WuerttVers' risk-adjusted capitalisation is likely to continue to improve from higher (between EUR 30-40 million) allocation to the equalization reserve, which compensates for the cash financed acquisition of Karlsruher Versicherung in 2007.
CCR is also expected to build and maintain an equalization reserve above twice the annual "Cat Nat" premium (compared to 110% today), bolstering its already extremely strong capitalization.