All of the following are true with regard to policyholders' surplus, EXCEPT:

All of the following are true with regard to policyholders' surplus, EXCEPT:



A. It measures the difference between what an insurer owns and what it owes.
B. It provides a financial cushion for the insurer if losses turn out to be higher than expected.
C. It equals nonadmitted assets.
D. It provides resources for expansion.


Answer: C. Policyholders' surplus measures the difference between what an insurer owns and owes, provides a financial cushion, and provides resources for expansion. It does not equal nonadmitted assets.

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