Question

The Premium is meant to include all except Expenses the company may incur if a loss is short term Losses the policy may have to pay for in the event of a claim Profit from the premiums the company collects Investment Results in the securities the company manages None of the above QUESTION 24 Why do Insurance companies lave Investment Operations? To stimulate the investment markets The State Law mandates it for insurance companies To increase surplus The premiums are to excessive and the overage has to be invested conservatively None of the Above QUESTION 25 Banks and Insurance Companies are similar because They both are governed and regulated by the Federal Government They both purchase reinsurance to cover excessive losses They both can suffer large losses due to inclement weather They both have to plan for long term risks and losses Click Save and Submit to save and submit. Click Save All Answers to see all MacBook Pro esc $ 1 % w # 2 & 4 5 6 7 Q W E R т T Y

Answer 1

Ans: Answer are numbered as given in the question.

23. The premium is meant to include all except the profit from the premium the company collects.

Reason- Because policyholders pay premiums in advance, insurers don't immediately consider premiums paid for an insurance contract as earnings. ... When the premium is paid, it is considered an unearned premium—not a profit.

24. The Investment companies have investment operations because the premiums are too excessive and the coverahe has to be invested conservatively.

Reason- Insurance companies invest in a unique set of assets as a direct result of their business model. The basic business model of an insurance company involves receiving a steady cash inflow from policyholders in the form of premiums that, over time, are allocated internally and flow to operating expenses, new investment assets, and payouts for claims. Thus, policyholder premiums are used, in part, to invest in assets that generate returns, which ultimately are used to pay future claims

25. Banks and Insurance companies are similar because they both can suffer large losses due to inclement weather.

Reason- This could lead to a significant increase in credit risk for banks stemming from decreased debt-repayment capacity, impaired collateral values, and higher lending costs. Severe weather events could also stunt economic growth, hamper employment, and weaken national infrastructure.

The frequency and severity of extreme weather events is likely to increase due to climate change, which is expected to increase insured and other economic losses caused by natural disasters. his requires adequate risk management strategies of insurance companies to handle increased risk