The Policyholders' Surplus of an Insurer Is Defined as the Difference

question 10

Multiple Choice

The policyholders' surplus of an insurer is defined as the difference between its

• A)assets and its liabilities.
• B)premium income and its expenses.
• C)reserves and its liabilities.
• D)assets and its nonadmitted assets.

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Definitions:

Net Profit Margin

A financial metric that measures the percentage of profit a company earns from its total revenue, indicating efficiency and profitability.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial position.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specified period.

Net Profit Margin

A financial performance ratio that shows the percentage of net income generated from total revenue, indicating the efficiency of a company in converting sales into actual profit.