Principles of Risk Management and Insurance, 13th Edition

Application Questions

1. Based on the following information, determine the policyholders’ surplus for XYZ Insurance Company:

   Total invested assets	$50,000,000
   Loss reserves	40,000,000
   Total liabilities	70,000,000
   Bonds	35,000,000
   Unearned premium reserve	25,000,000
   Total assets	90,000,000

2. Based on the following information, determine Mutual Life Insurance Company’s gain from operations before income taxes and dividends to policyholders:

   Total premium income	$20,000,000
   Licenses, taxes, and fees	580,000
   Death benefits paid	6,000,000
   Net investment income	3,000,000
   Commissions paid	5,900,000
   General insurance expense	2,500,000
   Surrender benefits paid	800,000
   Annuity benefits paid	1,600,000

3. A large casualty insurer ...