Should you ever need to collect on an insurance claim, the insurance company is expected to have that money available. Otherwise, it is (aptly named) insurance fraud.
Insurance companies must have reserves set aside to cover insurance claims made by policyholders. It's not legal for an insurance company to collect the premiums if they can't reasonably, rationally pay claims as they legitimately come in. The level of balance sheet reserves is established based on the level of claims filed historically by that company's policyholders for a given level of risk, deductibles, and other dial-turning events in InsuranceLand, which is definitely not the happiest place on earth...where the theme song of the park remains, "It's A Risky World, After All."
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Finance: What is a Consolidated Balance ...3 Views
Finance a la shmoop what is a consolidated balance sheet? okay people
this is a tale of two balance sheets it was the best of times right here and all [Lemonade stand balance sheet appears]
that cash no debt,, yeah and it was the worst of times and pretty much the
opposite and then one magical mergy day the two companies possessing these
two divergent balance sheets decided to you know merge it was a lovely ceremony [Bride and groom holding hands]
the bride wore white the groom stepped on the glass so then the balance sheets
were consolidated that is they were merged or combined or fully brought
together liabilities plus liabilities assets plus assets so the few dollars in
cash here in the worst of times balance sheet
well that was tacked on to the cash in the best of times balance sheet and the
same happened with long term liabilities and short and eventually after the
wedding night was you know consummated these two balance sheets had merged and [Man and girl standing by their lemonade stands]
consolidated and looked like this and that's what happens when companies merge
everything including their balance sheets consolidate let's hope they
generate lots of tiny cash flows and credits in the future....Mazel Tov
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