Insurance Glossary

Insurance Term - Capital

Equity of shareholders of a stock insurance company is known as capital. The company’s capital and surplus are measured by the difference between its assets, minus its liabilities. This value protects the interests of the company’s policy owners in the event it develops financial problems or a financial crunch; the policy holders’ benefits are thus protected by the insurance company’s capital. Shareholders’ interest is second to that of policyholders.

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