[I010]

impaired capital

The capital of an insurance company is said to be impaired if its liabilities, subtracted from its assets, leave less than the stated amount of capital. Most states have statutes outlining procedures to be taken by the insurance superintendent or commissioner in the event of such impairment. The word "impaired" has specific statutory meaning in state laws which may vary from state to state. Relevant state laws should be checked for meaning and effect.