Which of the following statements about the regulation of insurance company investments is (are) true?
I.The purpose of regulating insurance company investments is to prevent insurers from making unsound investments which could threaten their solvency.
II.Life insurers can invest an unlimited amount of their assets in common stocks.

Question

Quizplus · Accepted Answer

The first statement is true. The primary purpose of regulating insurance company investments is to ensure that insurers do not make risky and unsound investments that could threaten their financial stability and solvency. The second statement, however, is false. While life insurers can invest in stocks, there are limits to how much they can invest in equities, based on the type of policy they issue and the regulations of the state in which they operate. There is no unlimited amount of investment permitted in common stocks.

Which of the Following Statements About the Regulation of Insurance