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In Insurance Law, reserve is not equivalent to surplus but is in fact obligations to the insured.

In Life Insurance: It is the amount that, together with future premiums, interests and benefit of
survivorship will be sufficient, according to valuation assumptions, to pay future claims. All
valuations of policies are made upon net premium basis. The aggregate net value so ascertained
of the policies of the company shall be deemed its reserve liability which shall be provided for by
building funds in secure investments equal to such net value.

In Non-Life Insurance: The Insurance Code provides that every non-life insurance company must
maintain a reserve for unearned premiums on its policies that are in force which shall be charged
as a liability for the determination of its financial condition.
Insurance companies are required to keep its books, records,
accounts and vouchers in such manner that they may be readily
examined by the Insurance Commissioner or his agent to
determine the solvency of the insurance companies.
Examination shall be done at least once a year and whenever
the Insurance Commissioner considers the public interest
demands an examination of the affairs, financial condition and
method of business of the insurance company.
The Insurance Code likewise provides that insurance companies
are required to submit annual statements.
No Insurance Company other than life, whether foreign
or domestic, shall retain any risk on any one subject of
insurance in an amount exceeding twenty percentum of
its net worth.

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