Which of the following statements about the regulation of life insurance companies is (are) true?
I. The percentage of assets a life insurance company may invest in a specific type of asset (e.g., stocks or bonds) is generally limited by law.
II. The purpose of limiting the accumulation of surplus is to prevent an insurer from increasing its surplus at the expense of policyowner dividends.
A) I only
B) II only
C) both I and II
D) neither I nor II
Question 2
Which of the following statements about the regulation of insurance company investments is (are) true?
I. The purpose of regulating insurance company investments is to prevent insurers from making unsound investments which could threaten their solvency.
II. Life insurers can invest an unlimited amount of their assets in common stocks.
A) I only
B) II only
C) both I and II
D) neither I nor II
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