What Is A Capital Maintenance Agreement

(3) To avoid any doubt, the terms “Total Adjusted Capital,” “Company Action Level RBC” and “Surplus to Policyholders” the importance attributed to them by the laws and regulations on home insurance, or, with respect to “Total Adjusted Capital” and “Company Action Level RBC,” unless defined, have the meanings defined in the national association of insurance commissioners` (“RBC”) capital instructions based on risk(“) The term “minimum percentage” is the percentage attached to Schedule 1 agreed by AIG and the Company at least once a year from the date of presentation of the 2010 accounts to the State Of Residence Insurance Department 153s and after verification of standard and equity criteria (“agency criteria”) of Standard and Poor15s Corp. (“S-P.”). Moody153s Investors Service (“Moody153s”) and A.M Best Company (“A.M. Best”). Notwithstanding the commitment of the company and the AIG to annually review the minimum percentage indicated, the parties agree to review and revise more frequently the minimum percentage indicated when the parties agree, (a) to take into account substantial changes to one of the agency`s criteria adopted by the S-P after the date of this agreement. Moody153s or A.M. The best, on the one hand, or the law of the home state or the rules or instructions of NAIC RBC, on the other hand, results in the results differing from those of the legislation of the state of residence or the rules or instructions of NAIC RBC, b) the company concludes a substantial transaction treated substantially differently by the criteria of the agency. , on the one hand, and the rules or instructions of NAIC RBC, on the other hand, or (c) any other significant development or circumstances that concern the entity, the AIG and the entity agree to a reassessment of the minimum percentage indicated that it is then in effect. The concept of maintaining financial capital provides that a company`s capital is maintained only if, at the end of a financial period, the financial or monetary amount of its net assets is equal to or greater than the amount of its net assets at the beginning of the year, with the exception of distributions, the company being a life insurer subject to certain capital requirements of Texas insurance laws and regulations (the “State of Domiliar”); The concept of capital preservation means that a company only makes a profit when the costs of the operations have been fully recovered during a selected accounting period. For the calculation of earnings, the total value of the company`s financial and other investments must be known at the beginning of the period. This concept can have more serious consequences for non-profit organizations. State law or donor agreements may require that foundation balances not be lost, meaning that assets from other sources must be replenished during periods when the income of the invested funds is negative.