Question 1

Insurance rates are considered dynamic because of the actuarial cycle.

True

False

Question 2

Stock insurers do not show "capital" on their balance sheets.

True

False

Question 3

Combined ratio does not include income from investments.

True

False

Question 4

Insurance companies are required to submit uniform financial statements to the regulators. These statements are based on statutory accounting (SAP) as opposed to the generally accepted accounting (GAP) system.

True

False

Question 5

Each line of business has its own break-even point.

True

False

Question 6

Depending on the investment income contribution of each line of insurance, the longer tail lines have a smaller break-even combined ratio level.

True

False

Question 7

In a soft market, when insurance capacity is low.

True

False

Question 8

National Association of Insurance Commissioners (NAIC) model laws cannot be modified by the state; this is to ensure uniformity in insurance regulations.

True

False

Question 9

An insurer must have a license from each state in which it conducts business.

True

False

Question 10

The commissioner of insurance generally has more control over insurers not licensed in the state.

True

False