What Is Policyholder Surplus?
Policyholders’ surplus is a named insurer’s statutory capital cushion: admitted assets minus liabilities.
What Does Policyholder Surplus Measure?
On a statutory statement, surplus is the cushion after liabilities are subtracted from the assets the insurer is allowed to count. Related capital-and-surplus figures are generally admitted assets minus liabilities. That number belongs to a named legal entity and a reporting period, not to a brand.1
AM Best's Financial Size Category is a separate size indicator, shown as a Roman numeral. It is not a credit rating and is not the same fact as the surplus number on an insurer's statement.2,1
What Does Policyholder Surplus Not Prove?
Surplus is not an AM Best financial-strength rating, not a risk-based capital ratio, and not GAAP equity. Parent cash, a brand, or a funding round is not the issuing insurer's surplus.1
