If an insurer's admitted assets stayed the same but its liabilities decreased significantly, its policyholders' surplus would

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If an insurer's admitted assets stayed the same but its liabilities decreased significantly, its policyholders' surplus would

A. Either stay the same or decrease.
B. Increase.
C. Decrease.
D. Either stay the same or increase.

Answer: B. Increase

Insurance

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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?

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