feldblum surplus Flashcards
1
Q
Feldblum argues return on invested capital is best to develop profit margin for pricing→ 3 alternatives & problem w/ each
A
- explicit profit margin – can not compare insurance profit vs other industry profit
- return on assets – assets are not used to produce insurance policies
- return on equity – GAAP equity ≠ invested capital
2
Q
how insurers attract investors despite being double taxed
A
risk margin – pass on double taxation to policyholders in premium
3
Q
when accounting for non-admitted assets on income statement … why ∆ in non-admitted assets is used rather than absolute value
A
- prior surplus already accounts for prior impact of non-admitted assets (new S = prior S + current net income + charges to S)
4
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A
5
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A
6
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A
7
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A
8
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A
9
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10
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A
11
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A
12
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A
13
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A
14
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A
