What are the accounting measures of an insurer's liabilities to its policyholders?

Question

Quizplus · Accepted Answer

Reserves are required as an accounting measure of an insurer's liabilities to its policyholders. The reserves, in theory, are future interest earned and premiums to be paid. Certain regulations and laws require insurance companies have funds set aside to ensure future, existing, and ongoing claims can be paid. There must be enough money on hand to pay all claims in the event of some catastrophe at the local, state, or national level.

What Are the Accounting Measures of an Insurer's Liabilities to Its