Question

How is the test of insolvency by the regulator more rigorous for life insurance business compared to non-life insurance business?

a.

Life insurance business has stricter regulatory requirements

b.

In life insurance, insolvency affects policyholders much more than shareholders

c.

Non-life insurance business has stricter regulatory requirements

d.

Both life and non-life insurance businesses have the same level of regulatory rigor in insolvency testing

Posted under IC 89 Management Accounting

Answer: (b).In life insurance, insolvency affects policyholders much more than shareholders Explanation:In life insurance, insolvency affects policyholders much more than shareholders, making the regulator's test more rigorous.

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Q. How is the test of insolvency by the regulator more rigorous for life insurance business compared to non-life insurance business?
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