What is the definition of Surplus?
Surplus refers to the remaining amount or the difference between the assets and the liabilities of the insurance company. In essence, it's how much the insurance company has immediately available for it to meet their claims obligations to their policyholders.
The surplus serves as a cushion in case the insurance company is faced with an unpredictably high number of claims.
The surplus also provides a very useful indication of the insurance company's financial strength and stability. It also indicates the company's solvency or its ability to pay for claims.
The surplus represents the true profit the insurance company gains from premiums. The company can distribute the surplus by way of policyholders' bonus and shareholders' dividends.
| Not a bit | Very useful |
- Surplus Lines
- Surrender Charge
- Surrender Cost Comparison Index
- Swaps
- Tax Sheltered Annuity (TSA)
- Tax-Deferred Basis
- Ten-Day Free Look Provision
- Term Certain Annuity
- Term Life Insurance
- Territorial Rating
- Surety Bond
- Supplemental Coverage
- Superfund
- Suicide Exclusion Provision
- Substandard Risk Class
- Substandard Premium Rates
- Subrogation
- Structured Settlement
- Straight Life Annuity
- Stock Insurance Company