Insurers need to be able to meet their commitments to policyholders at all times, even in the case of unforeseen losses, so all insurers must have regulatory capital available to meet these commitments. To allow for the unforeseen losses, regulators make insurance carriers hold extra capital over and above their liabilities, which can act as a 'buffer' to ensure absolute protection for policyholders. When an insurance company talks about their 'surplus regulatory capital' they are describing the regulatory value of the available excess assets on top of the required minimum regulatory 'buffer'.