Capital Stock Insurance Companies

AAA

DEFINITION of 'Capital Stock Insurance Companies'

A capital stock insurance company is a company that gets its capital from contributions from its stockholders in addition to its surplus accounts and reserve accounts. In other words, a capital stock insurance company is one that gets a majority of its assets or money from the sale of shares or stock to stockholders.

INVESTOPEDIA EXPLAINS 'Capital Stock Insurance Companies'

In addition to issuing shares or stocks, insurance companies get their wealth from their surplus and reserve accounts. Reserve accounts are funds set aside by insurance company, at the beginning of a year to meet costs of old and new claims that have been filed. It is important to note that only publicly-traded insurance companies can be capital stock insurance companies.

RELATED TERMS
  1. Calendar Year Accounting Incurred ...

    Calendar year accounting incurred losses is a term used in the ...
  2. Stock

    A type of security that signifies ownership in a corporation ...
  3. Runoff

    The procedure of printing the end-of-day prices for every stock ...
  4. Insurance

    A contract (policy) in which an individual or entity receives ...
  5. Reserve Fund

    An account set aside by an individual or business to meet any ...
  6. Mass Merchandising

    A method of selling insurance policies in which an employer or ...
RELATED FAQS
  1. What happens if my insurance claim falls below the deductible level?

    Though the ins and outs of health insurance are often confusing, the concept of the insurance deductible is relatively straightforward. ... Read Full Answer >>
  2. How is the deductible I paid for my insurance claim treated for tax purposes?

    The deductible you pay on your health insurance policy may be tax-deductible if you meet certain conditions. However, whether ... Read Full Answer >>
  3. What level of reserve ratios is typical for an insurance company to protect against ...

    In the United States, and most developed nations, regulators impose required statutory capital reserve ratios on insurance ... Read Full Answer >>
  4. What risks do I face when investing in the insurance sector?

    Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>
  5. What are the main factors that impact share prices in the insurance sector?

    The main factors that impact share prices in the insurance sector are interest rates, earnings and actuarial risk. In the ... Read Full Answer >>
  6. Why do insurance policies have deductibles?

    Insurance policies have deductibles for behavioral and financial reasons. Moral Hazards Deductibles mitigate the behavioral ... Read Full Answer >>
Related Articles
  1. Insurance

    Is Insurance Underwriting Right For You?

    If you have excellent analytical skills and an eye for detail, this may be your calling.
  2. Insurance

    Should You Bite On Dental Insurance?

    Don't pay for a plan that won't cover your pearly whites when you need it to.
  3. Options & Futures

    Beginner's Guide To Auto Insurance

    Find the perfect policy that suits both your coverage and budgetary needs.
  4. Options & Futures

    5 Life Insurance Questions You Should Ask

    Confused about $1 million dollar insurance advertising claims? Decide whether they'll pay off for you.
  5. Insurance

    The Importance of Healthcare Risk Management

    Risk management is especially important in healthcare because human lives might be on the line. Here are some strategies to map out a plan.
  6. Insurance

    Medicaid and Nursing Homes: A Quick Guide to the Rules

    Medicaid can cover the costs of a long-term healthcare facility, if you qualify. But that's a big if.
  7. Professionals

    IRS Sets 2016 HSA Deduction Limits

    Contribution limits for HSA plans have increased slightly for 2016. Here's a breakdown of what they are and how they work.
  8. Insurance

    The Best Way to Insure Your Jewelry

    What you need to know to keep those baubles, bangles and beads safe.
  9. Insurance

    Did Obamacare Make Premiums Go Up?

    A careful look at data from nonpartisan sources suggests that any increases have actually been modest by historical standards.
  10. Insurance

    Who Needs Extortion Insurance?

    Insurance can help mitigate the financial damage of an extortion plot, but it’s important to read the fine print before taking out one of these policies.

You May Also Like

Hot Definitions
  1. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  2. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  3. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  4. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  5. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  6. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!