Which of the following statements about the regulation of life insurance companies is (are)true?
I.The percentage of assets a life insurance company may invest in a specific type of asset (e.g. ,stocks or bonds)is generally limited by law.
II.The purpose of limiting the accumulation of surplus is to prevent an insurer from increasing its surplus at the expense of policyowner dividends.

Question

Quizplus · Accepted Answer

I is true because there are generally laws or regulations that limit the percentage of assets a life insurance company can invest in a particular type of asset to ensure the overall safety and stability of the company's investments.

II is also true because limiting the accumulation of surplus ensures that the insurer is not taking excessive risks or using policyholder funds to increase their own surplus at the expense of policyowner dividends.

Which of the Following Statements About the Regulation of Life