To protect policyholders,state laws place limitations on a life insurance company's investments.The assets backing interest-sensitive products,such as variable life insurance and variable annuities,are not subject to these restrictions.Assets backing interest-sensitive products are placed in a special account called the life insurer's
A)policy reserve account.
B)policy loan account.
C)separate account.
D)policyholders surplus.

Question

Quizplus · Accepted Answer

Assets backing interest-sensitive products, such as variable life insurance and variable annuities, are placed in a separate account. This account is separate from the life insurance company's general account and is not subject to the same state law limitations on investments. The assets in the separate account are managed by the policyholders themselves, who bear the investment risk and have the potential to earn higher returns.

To Protect Policyholders,state Laws Place Limitations on a Life Insurance