Final answer:
A Life or P&C company would pass the health test if it is licensed and active in 5 states or less, have at least 75% of current year premiums written in the domicile state, and have premium and reserve ratios equal to or exceeding a certain percentage for both the current year and the prior year.
Step-by-step explanation:
In order for a Life or P&C company to pass the health test, it must meet several criteria. First, it must be licensed and active in 5 states or fewer. Second, it must have at least 75% of its current year premiums written in the domicile state. Finally, the company must have premium and reserve ratios that are equal to or exceed a certain percentage for both the current year and the prior year.