Equity of shareholders of a stock insurance company. The company’s capital and surplus are measured by the difference between its assets minus its liabilities. This value protects the interests of the company’s policyholders in the event it develops financial problems, the policy owners benefits are thus protected by the insurance company’s capital. Shareholders’ interest is second to that of policy owners.
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US: In captive insurance, an all-purpose term having one of three different meanings
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In captive insurance, an all-purpose term having one of three different meanings the amount initially needed to set up a captive, or the initial amount paid in the total of this paid-in capital plus other forms of capital, like letters of credit or the sum of these two plus accumulated surplus. The difference between capital in a captive and other forms of insurance capital is that the owners usually consider it risk capital, ready to be used up by adverse results of the business. This is why one seldom hears about “impairment of capital” in captive financial discussions. Instead, one hears about “reduction in capital.”