3-65 Which of the Following Did NOT Occur in the Life

question 82

Multiple Choice

3-65 Which of the following did NOT occur in the life insurance industry during the most recent financial crisis?

• A)Low equity values reduced asset-based fees on separate account assets.
• B)Losses were incurred on holding of commercial mortgage-backed securities and commercial loans.
• C)Asset-based fees declined on products such as variable annuities and pension fund assets that were tied to equity returns.
• D)Low interest rates and harsh economic conditions caused many policyholders to terminate or surrender their policies.
• E)Policy premium increased as more households and small businesses attempted to transfer risk to insurance companies.

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Definitions:

Obligor

A person or entity legally bound to provide a payment, service, or other benefit to another (the obligee) under the terms of a contract or legal agreement.

Negotiable Instrument

A formal written notice ensuring a particular sum of money will be paid, either immediately when asked or at a certain date, with the document specifying who is to pay.

Promissory Note

A written, legally binding document in which one party promises to pay another a specific sum of money, either on demand or at a defined future date.

Maker

The individual or entity that creates or signs a promissory note, thereby agreeing to pay the note's value at maturity.