Which of the following factors is not considered when an insurance rate or premium is calculated?
A)the cost of the actual losses
B)the cost of the insurance salesman and other company expenses
C)investment earnings on prepaid premiums
D)McCarran-Ferguson Act

Question

Quizplus · Accepted Answer

The McCarran-Ferguson Act is a federal law that gives states the power to regulate insurance. It is not a factor considered when calculating insurance rates or premiums, as it pertains to the regulatory structure of the industry rather than the financial aspects. The cost of actual losses, the cost of company expenses, and investment earnings on prepaid premiums are all factors that can impact the calculated premium for an insurance policy.

Which of the Following Factors Is Not Considered When an Insurance