Chapter 1 Flashcards
1
Q
Insurance vs non-insurance advantages and disadvantages:
A
Tax
-IPF rate
-Tax free rate
-RA
Higher expenses
-regulatory reserves
-training
-regulatory capital
Less flexible
-harder to adjust premium
-withdrawal penalties
-upfront commission and expense loading leads to low PV
2
Q
Why did demutualisation occur
A
-unable to write profitable NB
-contrained ability to raise capital or acquire other companies
3
Q
why have mergers and acquisitions increased
A
-higher cost of regulation
-focus on efficiencies and economies of scale
-not meeting capital requirements due to poor performance
