Which of the Following Statements Is True About Nonadmitted Coverage

question 15

Multiple Choice

Which of the following statements is true about nonadmitted coverage?

• A)They are written by companies authorized to write insurance in the country where a risk exposure is located.
• B)They use the country's currency for premiums and claims.
• C)Premiums are tax deductible in countries where nonadmitted coverage is permitted.
• D)If they are prohibited in a country, claim payments must be made directly to the local subsidiary.
• E)They use English, utilize terms and conditions familiar to U.S.risk managers, and provide flexibility in underwriting.

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Definitions:

Creditors

Individuals, businesses, or financial institutions that are owed money by debtors or customers.

Owner's Equity

Represents an owner's total investment in a company after subtracting liabilities from assets; it signifies the net value an owner has in the business.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.

Assets

Resources owned or controlled by a business or individual, expected to produce positive economic value or benefits in the future.