Which of the following statements is not correct about the insurance premium? A) The forecast of policyholders' losses is the starting point for the calculation of the risk premium for an insurance policy. B) The fair rate of return, which is a part of the insurance premium, is governed by law. C) Loading expenses increases the insurance premium. D) Most investment income of insurance companies comes from low risk investments, which reduces the insurance premium.

Question

Quizplus · Accepted Answer

The fair rate of return, which is part of the insurance premium, is not specifically governed by law but rather determined by market conditions, competition, and the insurance company's investment strategies and operational costs. Laws and regulations may influence aspects of insurance operations, but they do not directly set a fair rate of return.

Which of the Following Statements Is not Correct About the Insurance