What is the purpose of the interest maintenance reserve?
A) To absorb losses arising from sales of assets for less than their cost (capital losses)
B) To absorb losses arising from the insolvency of debtors (credit losses)
C) To absorb losses caused by changes (increases) in interest rates on government securities
D) To absorb losses caused by guaranty fund assessments made against insurer assets
C
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Of the following, which best describes a need that decreasing term insurance is often used to meet?
A) Providing long-term coverage at a reasonable premium B) Providing funds to pay off an outstanding loan at a reasonable premium C) Providing funds for final expenses at a reasonable premium D) Providing funds to pay off an outstanding loan at a high premium"
Which of the following subsequent events (post-balance-sheet events) would require adjustment of the accounts before issuance of the financial statements?
A. Loss of plant as a result of fire B. Changes in the quoted market prices of securities held as an investment C. Loss on an uncollectible account receivable resulting from a customer's major flood loss D. Loss on a lawsuit, the outcome of which was deemed uncertain at year end.