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

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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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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

In insurance,

In insurance, A) contracts made by the agent are considered to be contracts of the producer B) contracts made by the principal are considered to be contracts of the agent C) the insurer is the principal and the producer is the agent D) the producer is the principal and the insurer is the agent Answer: the insurer is the principal and the producer is the agent

Which is generally true regarding insureds who have been classified as preferred risks

Which is generally true regarding insureds who have been classified as preferred risks A) They can borrow higher amounts off of their policies. B) They can decide when to pay their monthly premiums. C) They keep a higher percentage of any interest earned on their policies. D) Their premiums are lower. Answer: Their premiums are lower

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