Return on Equity
Net income divided by total equity. Measures profitability by showing how efficiently invested capital is being used.
Reporting
Required Minimum Margin (RMM)
United Kingdom (UK) regulatory capital requirement. Set by using required factors against certain risk elements of the business.
Profit Margin
Present value of pre-tax regulatory income (excluding investment income on Target Capital) divided by present value of premiums and deposits
Present Value of Future Profits (PVFP)
In association with an acquisition of a company or block of business the asset set up on the books to account for the value of business. The assets are amortized in relationship to premium or profits depending on the underlying product characteristics.
Non-Admitted Assets
Assets that are not included on the balance sheet of an insurance company, including furniture, fixtures, past-due accounts receivable, and agents’ debt balances. See Assets
Ninety Day Rule
The Annual Statement requirement which provides that an insurer must establish a provision for certain balances when it has reinsurance recoverables over ninety days past due.
Net US GAAP Reserves
Net US GAAP Benefit Reserves less DAC and PVFP
Minimum Continuing Capital and Surplus Requirement (MCCSR)
Canadian regulatory capital requirement. Set by using required factors against certain risk elements of the business. Some amounts are set through stochastic analysis.
Incurred Loss Ratio
The percentage of losses incurred to premiums earned.
Generally Accepted Accounting Principles (GAAP)
Generally accepted accounting principles (GAAP) accounting is used in financial statements that publicly-held companies prepare for the Securities and Exchange Commission. See Statutory accounting principles / SAP