Question

What is the main reason why governments may prefer prudent reserving from a regulatory standpoint?

a.

To increase taxable profit

b.

To protect customers and the insurance market

c.

To avoid burdening corporate failure

d.

To reduce regulatory oversight

Posted under IC 14 Regulations of Insurance Business

Answer: (b).To protect customers and the insurance market Explanation:Governments prefer prudent reserving to protect customers from company failure, ensure stability in the insurance market, and avoid burdening corporate failure.

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Q. What is the main reason why governments may prefer prudent reserving from a regulatory standpoint?
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