Unscrupulous insurance companies can also cheat the public by claiming to have assets they do not have, or assets that are worth more than they really are. The reason companies do this is:

Question

Quizplus · Accepted Answer

Insurance companies are required to maintain a certain level of capitalization to ensure that they have the monetary reserves necessary to pay out claims. However, some companies may falsely claim to have more assets than they actually do in an attempt to meet these requirements and appear more financially stable than they really are. This can be a deceptive tactic to attract new investors or policyholders.

Unscrupulous Insurance Companies Can Also Cheat the Public by Claiming