Security Valuation

What Does Security Valuation Mean?

Security valuation is the process by which regulators evaluate the safety and risk of the securities held by an insurance company. This assessment ensures that the company is not exposed to excessive risk, thereby safeguarding policyholders from significant financial losses.

Insuranceopedia Explains Security Valuation

The insolvency of an insurance company can lead to significant problems, including substantial financial losses for policyholders, who may also fail to be reimbursed for insured claims. To mitigate this risk, state regulators closely monitor insurance companies to ensure they are operating responsibly. One of the primary tools they use for this oversight is security valuation.