The amount of extra cash an insurance company needs, in addition to premiums collected, to meet its obligations.
Regressive Insurance sells insurance policies to protect against hair loss to 1980s rock bands. To date, it has generated $2 million in premiums by selling $100 million worth of coverage. All of Regressive's clients were performing as part of an all-star ensemble on the "Laser Show Tour, sponsored by Nair."
En route to a gig, their tour bus driver swerved to avoid hitting a hare on the road, causing the bus to flip, letting loose several gallons of the sponsor's hair removal product. While nobody was seriously injured, Regressive suddenly found itself with a $98 million benchmark surplus.
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