Question

How is the solvency ratio calculated?

a.

By dividing the liabilities by the assets

b.

By dividing the premium income by the claims paid

c.

By dividing the Actual Solvency Margin (ASM) by the Required Solvency Margin (RSM)

d.

By dividing the reserves by the premium income

Answer: (c).By dividing the Actual Solvency Margin (ASM) by the Required Solvency Margin (RSM) Explanation:The solvency ratio is calculated by dividing the Actual Solvency Margin (ASM) by the Required Solvency Margin (RSM).

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Q. How is the solvency ratio calculated?

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