Question

Why do insurance companies often adopt a conservative approach in fixing commission rates?

a.

To increase sales volume

b.

To maximize profits for shareholders

c.

To minimize regulatory constraints

d.

To attract more distributors

Answer: (b).To maximize profits for shareholders Explanation:Insurance companies often adopt a conservative approach in fixing commission rates to maximize profits for shareholders. By carefully managing commission expenses, insurers aim to optimize their financial performance and enhance shareholder value.

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Q. Why do insurance companies often adopt a conservative approach in fixing commission rates?

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