Solvency is the ability of insurance companies to repay debts. An insurance company shall have capital commensurate with its risks and business scale, and ensure the solvency adequacy ratio is not less than 100%. Solvency adequacy ratio = actual capital of insurance company/minimum capital The actual capital of an insurance company refers to the difference between recognized assets and recognized liabilities. The minimum capital of an insurance company refers to the amount of capital that an insurance company should have in order to absorb the adverse effects of asset risk, underwriting risk and other related risks on its solvency according to the requirements of regulatory agencies.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.