Experience Refund Provisions of Group Insurance Contracts Are Most Often

question 122

Multiple Choice

Experience refund provisions of group insurance contracts are most often concerned with the manner of distributing any profits between the insurer and the insured group. The agreements usually contain provisions specifying how losses will affect the profit allocations for the insured group. In such situation:

• A) Losses may or may not be charged back
• B) Losses can never be charged back
• C) Gains are distributed according to the agreement between both the parties
• D) If charged back, losses for each group are usually accumulated for a certain number of years

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Definitions:

EPS Growth Rate

The rate at which a company's earnings per share (EPS) grows over a specified period, indicating the company's profitability trend.

Current Stock Price

The price at which a specific stock is currently trading on the stock market.

Preferred Stock

A category of corporate ownership that has a greater entitlement to the company's assets and profits compared to common stock, typically receiving payouts before common stockholders.