In the NAIC model for life insurance companies,which risk covers the amount of capital necessary to meet the maximum contribution that an insurance company may need to make to the state guarantee fund?

Question

Quizplus · Accepted Answer

The risk that covers the amount of capital necessary to meet the maximum contribution that an insurance company may need to make to the state guarantee fund is Business risk. This risk refers to the potential losses from a company's operations, including the costs associated with regulatory compliance, litigation, and the financial impact of adverse market conditions. State guarantee funds generally provide a backstop to policyholders in the event that an insurance company becomes insolvent. Life insurance companies are required to maintain adequate capital reserves to ensure that they can meet their obligations to policyholders and make any necessary contributions to state guarantee funds.

In the NAIC Model for Life Insurance Companies,which Risk Covers