14. A grace period on an insurance policy: a. Is the time period prior to the policy taking force b. Prohibits the insurance company from canceling your policy in some cases c. Is the time limit where you must file a claim for it to be considered d. A provision where the company might extend consideration to the insured 15. A balance sheet summarizes total assets and total liabilities: a. True b. False 16. The loss reserve on an insurance company balance sheet is: a. A liability item b. An asset item c. A component item 17. An insurer is required by law to maintain certain reserves on its balance sheet: a. True b. False, they are only required by company regulations 18. Insurers are regulated by states for which reason listed below: a. To encourage safe-driving discounts b. To recommend companies to consumers c. To maintain insurer solvency d. To standardize floor plans 19. The state needs to help compensate for inadequate consumer knowledge because: a. Companies are generally more knowledgeable concerning technical contracts b. Because consumer knowledge is a non-essential component of contract law c. Both of the above 20. Why does the state believe it is necessary to ensure reasonable rates? a. To protect consumers from unfair prices b. To make sure that the solvency of insurers is threatened c. Both of the above