Solvency Fund
/ˈsɒlvənsi fʌnd/
Definitions
- (n.) A reserve of funds maintained by an insurance company or financial institution to ensure it can meet its long-term obligations and claims.
The regulatory authority requires insurers to maintain a solvency fund to protect policyholders.
Forms
- solvency fund
- solvency funds
Related terms
See also
Commentary
Typically established pursuant to regulatory requirements, a solvency fund acts as a financial safeguard ensuring an entity's ability to pay debts and claims; clarity on its minimum level is essential in drafting financial compliance provisions.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.