Total Admitted Assets
What Does Total Admitted Assets Mean?
Total admitted assets refer to the assets that are recognized and allowed by state laws to be included in the financial statements of an insurance company. These assets are crucial in assessing the solvency of the insurance firm. While state laws may vary, there is generally widespread agreement on which assets should be considered when determining solvency.
Insuranceopedia Explains Total Admitted Assets
For an insurance company, total admitted assets are a statutory requirement in financial documents. While different states have varying laws, guidelines are in place to determine which assets are admitted and which are not.
Typically, total admitted assets include liquid assets and receivables. Liquid assets are company assets that can be easily converted into cash within a reasonable time, such as within a financial or calendar year. Receivables primarily consist of premiums due from policyholders. These assets are significant components of an insurer’s capital adequacy, which state regulators use to assess solvency and ensure that insurers remain financially stable and capable of covering policyholders’ claims.
