New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    What is the safety margin that insurers must maintain to

    safeguard the interests of policyholders called?
    A Protection margin Correct Answer Incorrect Answer
    B Solvency margin Correct Answer Incorrect Answer
    C Profit margin Correct Answer Incorrect Answer
    D Cost of risk bearing Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Explanation: The solvency margin is the safety cushion that insurance companies are required to maintain to ensure that they have sufficient financial resources to cover potential losses and meet their obligations to policyholders. It helps protect policyholders' interests by ensuring that the insurer remains financially stable and capable of fulfilling its commitments.

    Practice Next

    Relevant for Exams: