Life · Chapter 6 · Premiums
Policy Reserves / Legal Reserve
Definition
Funds an insurer sets aside to pay current and future claims — a fixed liability required by law and a measure of solvency. The legal reserve amount is set by the state commissioner based on the CSO table and assumed interest rate.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms