Policy reserves are a/an of an insurance company. Balance sheet liability Balance sheet asset Separate account item Insurance guarantee fund payment Income statement revenue item Property and casualty insurers hold short term assets than life insurers because property and casualty loss rates are predictable than life insurance loss rates. More, more More, less Less, less Less, more The primary regulator of insurance firms is the NASD SEC FDIC State insurance regulator The problem of adverse selection implies that many people who do not need insurance coverage have it through group plans. means that those people who apply for insurance are most likely to need the insurance coverage. means that the insured is not as likely to protect property as uninsured. creates a savings dement along with the insurance component of the premium and policy. The insures losses of funds deposited with securities firms in the event of failure of a securities firm. SIPC NASD FDIC SEC An investor has $50,000 which he can invest today. In addition to this amount, he can also invest $6,000 per year for twenty-five years (beginning one year from now) at which time he will retire. He plans on living for twenty-five years after he retires. If interest rates are 7%, what size annual annuity payment can he obtain for his retirement years? (All annuity payments are at year end) $551, 686 $55, 851 $56, 190 $47, 248 $442.674