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Definition of far (Entry 2 of 3)
Adverb
before the 12th century, in the meaning defined at sense 1
Adjective
before the 12th century, in the meaning defined at sense 1a
Adverb
Middle English fer, from Old English feorr; akin to Old High German ferro far, Old English faran to go — more at fare
(Entry 1 of 2)
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far
adverbSynonyms & Antonyms of far (Entry 2 of 2)
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FAR
abbreviationWhat It Is
Free asset ratio refers to the net assets of an insurance company as a percentage of its total assets. Free assets are the same as net assets, that is, assets that are not obligated to insurance policies.
How It Works
The formula for calculating FAR is:
FAR = (Total Assets – Secured Assets) / Total Assets
An insurance company must maintain certain financial reserves on hand to cover its obligations to its policyholders. The insurance company invests in assets that produce income for the company. A portion of these assets is pledged to secure the obligations of the company. The remaining portion is free assets.
For example, if Company XYZ has $1,000,000 in total assets and $700,000 of that are liabilities tied to policies, then its free asset ratio is 30%.
1,000,000 - 700,000 = 300,000
300,000 / 1,000,000 = 0.3 = 30%
Why It Matters
British insurance companies use this ratio as a solvency measure. It is measured as available assets less required minimum margin of solvency divided by admissible assets. The higher the percentage of the ratio, the more easily it allows the insurance company to expand its operations.
Source: Investing Answers
far
adverb(Entry 1 of 2)
far
adjectiveEnglish Language Learners Definition of far (Entry 2 of 2)
far
adverb(Entry 1 of 2)
far
adjectiveKids Definition of far (Entry 2 of 2)