Exam 6: Financial Services: Insurance Companies

If the loss ratio on a line of insurance is 70 percent and loss adjustment expenses are 33 percent,then the line is profitable before dividends if the ratio of

Separate accounts business represents those policies and annuities whose return or payout is dependent on the return earned on the premiums invested in the separate account.

Insurance guaranty funds involve a permanent fund similar to the FDIC for the purpose of compensating the policyholders of failed insurers.

The total assets of property-casualty insurers were approximately 35 percent of life insurers total assets as of 2015.

Guaranteed investment contracts (GICs)offered by a life insurance company

An operating ratio greater than 100 indicates that the insurance product line was profitable for a giving year.

With variable life insurance,the term "variable" refers to the variable nature of the benefit because premium payments are invested in mutual funds whose return can vary over time.

As currently structured,contributions to a state-sponsored guarantee fund are collected only after the actual failure of an insurance company.

For property-casualty insurers,losses are higher for lines that are exposed to

State-sponsored insurance guarantee funds are run and administered by private insurance companies operating in the state.

The largest asset on property-casualty insurers' balance sheet as of 2015 was

In general,maximum levels of losses in the property-casualty industry are more predictable for liability lines than for property lines.

Separate accounts business of a life insurance company represents

What does the loss ratio measure in any particular year?

Property-casualty insurance involves

For property-casualty insurers,loss rates are more predictable for

Calculate the annual cash flows of a $500,000,12-year fixed-payment deferred annuity earning a guaranteed 5 percent per year if annual payments are to begin at the end of year 4.

Property-casualty underwriting risk only exists when the premiums generated on a given insurance line are less than the claims (losses)on the line.

The Wall Street Reform and Consumer Protection Act (2010)led to the Federal Reserve becoming a major supervisor of insurance firms.

Annuities are an important product sold by life insurance companies.Which of the following statements is correct as of 2015?