Insurance Capital Standards

Insurance Capital Standards are regulations that ensure insurance companies have enough financial resources to meet their obligations to policyholders. They set minimum levels of capital—money or assets—that insurers must hold to withstand unexpected losses or market downturns. These standards promote financial stability in the insurance industry, helping prevent company failures that could harm policyholders or the broader economy. Essentially, they act as a safeguard, requiring insurers to maintain a healthy financial cushion to remain solvent under various conditions.