1. Which of the following is a true statement concerning insurers surplus? Surplus determines an insurer's capacity which is the insurer's level of underwriting flexibility in the pricing and selection of new business and renewals. When surplus is strong insurers can reduce premiums and loosen underwriting standards Profitable underwriting increases insurers' surplus A and B only A and C only All of the above None of the above 2. Rate making refers to insurance pricing. Insurers' rates are highly regulated. List and describe the three requirements of state regulation of insurance rates: Rates must be adequate Rates must not be excessive Rates must not be discriminatory 3. What are the three major sections of the balance sheet of an insurer? Assets Surplus and Capital 4. List the four business objectives of insurers in designing a rating system: stablity encourage loss control Body The I'm