DEFINITION of 'Benchmark Surplus'

Benchmark surplus is an insurance term that refers to the amount of surplus from an additional capital source that would be necessary to act as a supplement to the cash flow. The benchmark surplus would be required when unforeseen contingencies occur that could disrupt or impair the cash flow necessary for an insurance company to make future benefit payments for which it has already received the premiums.

BREAKING DOWN 'Benchmark Surplus'

Benchmark surplus refers to any needed additional equity or surplus beyond the equity or surplus currently held by an insurance company or industry. Benchmark surplus is the liquid assets required in addition to those currently held currently held, that an insurance company would need to cover additional benefit claims.

RELATED TERMS
  1. Surplus

    The amount of an asset or resource that exceeds the portion that ...
  2. Budget Surplus

    A situation in which income exceeds expenditures. The term "budget ...
  3. Adjusted Surplus

    The surplus (assets minus liabilities) of an insurance company ...
  4. Surplus Lines Insurance

    A policy that protects against a financial risk that is too high ...
  5. Capital Surplus

    Equity which cannot otherwise be classified as capital stock ...
  6. Producer Surplus

    An economic measure of the difference between the amount that ...
Related Articles
  1. Personal Finance

    Explaining Budget Surplus

    Budget surplus is an economic term describing a situation where revenue exceeds expenditures.
  2. Investing

    Understanding Consumer Surplus

    Consumer surplus is an economic measure of consumer satisfaction, which is calculated by analyzing the difference between what consumers are willing to pay for a good or service, relative to ...
  3. Investing

    Germany Achieves Another Record Trade Surplus

    Germany has posted yet another record trade surplus while the rest of the eurozone struggles from weak demand and deflationary pressures.
  4. Insights

    What's a Producer Surplus?

    In economics, producer surplus is the difference between the price at which the producer actually sells a product and the minimum price the producer would have accepted for the product. The surplus ...
  5. Investing

    Cleaning Up Dirty Surplus Items On The Income Statement

    Dirty surplus items can skew net income. Knowing how to account for them will give you a cleaner picture.
  6. Investing

    What does Current Account mean?

    The current account reflects the difference between a country’s savings and investments.
  7. Insights

    The Balance Of Trade

    The balance of trade is the difference between a country’s imports and exports. A trade deficit occurs when a country buys or imports more goods from other countries than it sells or exports. ...
  8. Investing

    What's the Balance of Trade?

    The balance of trade is the difference between the value of all the goods and services a country exports and the goods and services it imports.
  9. Investing

    What Is A Trade Surplus?

    A trade surplus occurs when a country’s exports exceed its imports for a given period of time.
RELATED FAQS
  1. For what purpose is the consumer surplus figure used?

    Understand who uses the consumer surplus figure and why it's used. Learn why companies want to minimize consumer surplus ... Read Answer >>
  2. What is the difference between consumer surplus and economic surplus?

    Learn the difference between consumer surplus and economic surplus, how the concepts are related and the important theoretical ... Read Answer >>
  3. What's the difference between economic value added (EVA) and producer surplus?

    Understand economic value added and producer surplus. Learn why companies focus on economic value added and producers focus ... Read Answer >>
  4. What does it signify about a given product if the consumer surplus figure for that ...

    Find out about high consumer surplus and what it means for utility and the structure of supply and demand in the market for ... Read Answer >>
  5. What's does the current account have to do with the trade balance?

    Learn how a nation's trade balance is factored into its current account, and the differences between these two common terms. Read Answer >>
  6. Can scarcity and surplus coexist together?

    Can surplus and scarcity exist at the same time? Many examples of redistributing wealth and corporate welfare take advantage ... Read Answer >>
Hot Definitions
  1. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. ...
  2. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  3. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  4. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  5. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  6. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
Trading Center