Definitions for "SOLVENCY MARGIN"
The minimum level that a regulated insurance company needs to cover with solvency capital to operate under normal conditions. The regulator prescribes the definition: the required minimum solvency margin is effectively a weighted average of the technical provisions. In general the solvency margin required for unit-linked products is significantly lower than that required for traditional life (non-linked) business. In Ireland the regulator's expectation is that a life company's capital would in practice be at or above 150% of the minimum.
The ratio by which assets exceed liabilities and is, to some extent, a yardstick of financial health of an insurance company. In many countries legislation exists to set minimum standards.
The minimum allowed excess of an insurance companyâ€(tm)s capital over its liabilities.... more on: Solvency margin
Level of unrestricted, unencumbered own funds required to ensure the company's sustained ability to meet contractual obligations.