It is important for the insurer to have a sufficient reserve to prove companys ability to meet its existing liabilities and to continue writing business on a sound basis.

1. Describe the nature of liabilities assumed by a general insurer transacting the usual range of business.
2. Describe how the liabilities identified in (a) above constrain the investment policies of a prudent general insurer.
3. Describe how you would access the suitability or otherwise, investment held by a general insurer.