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Which of the following statements is correct regarding the amount of policyholder surplus in the property casualty insurance?

a) Policyholder surplus represents liabilities
b) Policyholder surplus represents assets
c) Policyholder surplus is the same as net income
d) Policyholder surplus is a measure of solvency

User CrazyC
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1 Answer

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Final answer:

Policyholder surplus in property casualty insurance is a measure of solvency and represents the difference between the company's assets and liabilities, providing financial stability and a cushion for unexpected losses.

Step-by-step explanation:

The correct statement regarding the amount of policyholder surplus in the property casualty insurance is that policyholder surplus is a measure of solvency. Policyholder surplus is neither liabilities nor assets but represents the difference between a company's insurance assets and its liabilities. This surplus acts as a financial cushion that ensures the insurance company can cover all its policyholders' claims after all liabilities are accounted for. The surplus also supports the insurance company's financial stability and its ability to withstand unexpected losses.

User FirstOne
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