Capital Stock Insurance Companies

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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.

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