What Does Deferred Tax Asset Mean?

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What does Deferred Tax Asset mean? Read on to discover the definition & meaning of the term Deferred Tax Asset - to help you better understand the language used in insurance policies.

Deferred Tax Asset

Deferred Tax Asset

The amount of loss reserves or unearned premium that is not deducted from an insurer's income when calculating income taxes. The deferral in the tax deduction arises because of the requirement to discount loss and unearned premium reserves. The insurer records an asset equal to the expected future amount of the tax deduction.

We hope the you have a better understanding of the meaning of Deferred Tax Asset.

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