An insurance company’s general account is the combined (or aggregated total) of investments and other assets that the insurance company may hold that are readily available in order to pay out on claims and the benefits laid out in policies that the insured or policy holding parties are entitled to contractually.
In some cases the insurance company’s general account is the sum total of all their assets if they are not represented by individual separate accounts by the insurance firm. The insurance company may or may not operate separate accounts and if they do not the only account they report may be considered to be the firm’s general account.
It’s worth noting that a general account is nothing as simple as a bank account, or even a general ledger account. It is the combination of assets such as bonds, stocks, precious metals, cash, and other easily liquefied assets that belong to the insurer and not simply a total of the cash reserves of the company at any point in time.
There is no established legal right through an insurance contract or by virtue of being a policy holder with a specific insurance firm, to any entitlement or direct interest in an insurance firm’s general account.
In fact the insurance company’s general account has a general obligation to all policy holder’s claims and benefits but not to a specific individual claim or benefit. This means that in practice a policy holder is beholden to the risks presented to the credit flow of their insurer. If an insurance company becomes insolvent (or fails or enters bankruptcy) then there is no direct relationship between an individual claim or benefit and the secured assets of the insurance firm.
In the United States individual state insurance departments hold the responsibility for auditing (examining) an insurance company and generally this is to decide whether the firm is being soundly managed (on a fiscal basis) and that the policy holders are properly protected in line with the firm’s level of risk exposure.
There are also rating agencies such as AM Best that act as external market guides to the strengths of insurance companies and they will independently evaluate firms in terms of many different factors including their ability to meet claims and benefits, their approach to financial management and risk analysis as well as other client facing expectations and experiences.