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Which of the Following Statements About the Regulation of Life

question 17

Multiple Choice

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.


Definitions:

Inflation Rate

The speed at which the overall price level for goods and services increases, leading to a decline in buying power.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Bracket Creep

A phenomenon where inflation pushes income into higher tax brackets, increasing taxation without an actual increase in real purchasing power.

Tax Liabilities

Tax liabilities are the amounts of money that individuals, companies, and other entities are legally obligated to pay to local, state, or federal tax agencies.

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