Valuation Reserve

The funds set aside by life insurers as required by state law to compensate for declines in the value of investment instruments that are held by the insurance company as assets. Valuation reserves are required because life insurance contracts can be in effect for long periods of time, and the securities valuation reserve is intended to protect the company's loss reserves in the event that the insurer's investments are under-performing.

Prior to 1992, the mandatory securities valuation reserve (MSVR) required a liability reserve to be maintained by the National Association of Insurance Commissioners (NAIC) to protect against value changes in an insurance company's securities investments. Following 1992, the requirements set forth by the MSVR were transferred into the asset valuation reserve.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Valuation Reserve — See Mandatory Securities Valuation Reserve …   Ballentine's law dictionary

  • valuation reserve — noun a reserve fund created by a charge against profits in order to provide for changes in the value of a company s assets • Syn: ↑valuation account, ↑allowance, ↑allowance account • Hypernyms: ↑reserve account, ↑reserve fund * * * noun se …   Useful english dictionary

  • valuation reserve — An allowance to provide for changes in the value of a company s assets, such as depreciation. Bloomberg Financial Dictionary …   Financial and business terms

  • Asset Valuation Reserve - AVR — Capital required to be set aside in order to cover a company against unexpected debt. The asset valuation reserve serves as a backup for equity and credit losses. A reserve will have capital gains or losses credited or debited against the reserve …   Investment dictionary

  • Securities Valuation Reserve — See Mandatory Securities Valuation Reserve …   Ballentine's law dictionary

  • Mandatory Securities Valuation Reserve — A reserve fund required to be maintained by insurance companies in some states for the purpose of absorbing fluctuations in prices of securities …   Ballentine's law dictionary

  • reserve account — noun funds taken out of earnings to provide for anticipated future payments • Syn: ↑reserve fund • Hypernyms: ↑reserve, ↑backlog, ↑stockpile • Hyponyms: ↑hidden reserve, ↑pool, ↑ …   Useful english dictionary

  • reserve fund — noun funds taken out of earnings to provide for anticipated future payments • Syn: ↑reserve account • Hypernyms: ↑reserve, ↑backlog, ↑stockpile • Hyponyms: ↑hidden reserve, ↑pool, ↑ …   Useful english dictionary

  • valuation account — noun a reserve fund created by a charge against profits in order to provide for changes in the value of a company s assets • Syn: ↑valuation reserve, ↑allowance, ↑allowance account • Hypernyms: ↑reserve account, ↑reserve fund * * * noun …   Useful english dictionary

  • Valuation using discounted cash flows — is a method for determining the current value of a company using future cash flows adjusted for time value. The future cash flow set is made up of the cash flows within the determined forecast period and a continuing value that represents the… …   Wikipedia

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