What is the definition of Liquidation?
Liquidation refers to the process where the real assets of the business is sold and turned into cash. For the insurance industry, this may happen when an insurance company becomes insolvent. The state insurance department will step in and act as liquidator. It facilitates the sale of the company's assets in order to have the funds to pay for the claims and unearned premiums of the insurance company's policyholders.
The state regulator releases a liquidation order to give it the legal right to start the liquidation process. The state insurance commission also informs other states about the liquidation of the insurance company. This will help other states know the status of a certain insurance company.
Liquidation may either be voluntary or compulsory.
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- Liquidity
- Liquor Liability
- Lloyds
- Lloyd’s of London
- Long-Term Care Insurance
- Long-Term Disability Income Insurance
- Loss
- Loss Adjustment Expenses
- Loss Costs
- Loss of Use
- Line
- Limits
- Life Insurance
- Life Income with Refund Annuity
- Life Annuity
- Life Annuity with Period Certain
- Liability Insurance
- Level Premium Policies
- Law of Large Numbers
- Lapse