In States That Use This Method, an Insurer or Its

question 30

Multiple Choice

In states that use this method, an insurer or its rating bureau must file its new rates and have them approved by the commissioner before using them.Identify this property/casualty rate regulation method.

• A)Prior approval method
• B)File-and-use method
• C)Twisting method
• D)Statutory accounting method
• E)Remittance method

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Definitions:

Cost Of Goods

The total cost incurred to acquire or manufacture the products sold during a specific period.

Conversion Costs

The sum of direct labor costs and manufacturing overhead costs, incurred to convert raw materials into finished products.

Direct Materials

Raw materials that are directly traceable to the manufacturing or production of a specific product.

Direct Labor

Direct Labor is the labor cost directly associated with the production of goods or services, which can be easily traced to individual units of products.