Why Are Some Mutual Insurers Referred to as "Assessment Mutuals

question 22

Multiple Choice

Why are some mutual insurers referred to as "assessment mutuals"?

• A)They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written.
• B)They are noted for being very thorough in their assessment of investment opportunities.
• C)They are assessed for state premium taxes only if they make a profit.
• D)They can assess policyowners if premiums are insufficient to pay losses and expenses.

---

Definitions:

English Auction

A type of auction where bidders openly bid against one another with each subsequent bid being higher than the previous bid, and the highest bidder wins.

Reserve Price

The minimum price at which a seller is willing to sell an item in an auction, below which the item will not be sold.

Expected Profits

The predicted average profit of a business activity, accounting for the various possible outcomes and their probabilities.

English Auction

A public sale in which goods or properties are sold to the highest bidder, where the price ascends with successive bids until no higher bids are made.