What does Conditional Reserves mean? Read on to discover the definition & meaning of the term Conditional Reserves - to help you better understand the language used in insurance policies.
Conditional reserves are surplus amounts an insurance company sets aside specifically to answer future claims. Since insurance companies are in the business of risks, and conditional reserves, which are funds taken from the asset lists but treated as liabilities to preclude their utilization for operation or for investment, provide a mechanism for cash readiness.
We hope the you have a better understanding of the meaning of Conditional Reserves.