PlumBot: Bot: Creating new article from JSON

2026-03-15T15:33:29Z

Bot: Creating new article from JSON

New page

📋 '''Funds flow statement''' is a transactional document — distinct from an accounting cash-flow statement — that maps every payment to be made on the closing date of an insurance [[Definition:Mergers and acquisitions (M&A) | M&A]] deal, specifying which party sends what amount, to whom, and into which bank account. In insurance transactions, the funds flow statement can be especially complex because the purchase price often incorporates adjustments for [[Definition:Net asset value (NAV) | net asset value]], [[Definition:Loss reserves | reserve margins]], [[Definition:Regulatory capital | regulatory capital]] floors, and [[Definition:Reinsurance | reinsurance]] settlements that must be calculated and verified shortly before closing.

⚙️ A typical funds flow statement for an insurance acquisition itemizes the gross purchase price, any [[Definition:Escrow | escrow]] amounts held back to cover potential [[Definition:Indemnity | indemnity]] claims or [[Definition:Completion accounts | completion accounts]] adjustments, advisory fees payable to [[Definition:Investment bank | investment banks]] or legal counsel, debt repayments if existing [[Definition:Acquisition financing | acquisition financing]] is being retired or refinanced, and regulatory deposits that must remain in place to satisfy [[Definition:Solvency ratio | solvency requirements]]. Each line item includes wire-transfer instructions with account numbers, bank details, and the precise currency of payment — a non-trivial detail when the target operates across jurisdictions with different functional currencies. The document is typically circulated in draft form several days before closing, reviewed by all parties and their counsel, and finalized only once the [[Definition:Completion accounts | closing adjustments]] have been agreed.

💡 Errors in the funds flow statement can delay closing, trigger contractual breaches, or create regulatory complications — for example, if an insurance subsidiary's required [[Definition:Regulatory capital | capital]] is inadvertently swept out in a misdirected payment. In jurisdictions where insurance regulators must approve capital movements and [[Definition:Dividend | dividend]] upstreaming from regulated entities, the funds flow must align precisely with the conditions set out in the regulatory approval. Deal teams in insurance M&A treat the funds flow statement as a critical control document: it is the mechanism that translates the negotiated economics of the [[Definition:Share purchase agreement (SPA) | share purchase agreement]] into actual money movement, and any discrepancy between the two will surface immediately as a closing dispute.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Completion accounts]]
* [[Definition:Escrow]]
* [[Definition:Share purchase agreement (SPA)]]
* [[Definition:Closing condition]]
* [[Definition:Net asset value (NAV)]]
* [[Definition:Mergers and acquisitions (M&A)]]
{{Div col end}}

Definition:Funds flow statement - Revision history

PlumBot: Bot: Creating new article from JSON