Under statutory accounting principles (SAP), what is the calculation of an insurer's total admitted assets minus its total liabilities called?

The calculation of an insurer's total admitted assets minus its total liabilities is referred to as policyholders' surplus. This concept is crucial in insurance accounting, particularly within the framework of statutory accounting principles (SAP).

Policyholders' surplus represents the funds that remain available to an insurer after all liabilities have been accounted for, effectively indicating the financial health and solvency of the insurer in relation to its obligations to policyholders. It includes the insurer's net worth and equity capital but is more specifically focused on the funds that back the policyholders' claims and contribute to the overall stability of the insurance operation.

Understanding this metric is important for regulators, as it helps gauge whether an insurer has adequate resources to pay out claims and meet other obligations. The surplus can serve as a buffer against unforeseen losses, ensuring that the insurer can remain solvent and operate effectively within the insurance market.