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    Question

    What is the primary characteristic of a "soft market" in

    insurance?
    A High premiums and limited coverage. Correct Answer Incorrect Answer
    B Low premiums and increased competition Correct Answer Incorrect Answer
    C High profits and limited competition Correct Answer Incorrect Answer
    D Low profits and increased competition Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The correct answer is B. Low premiums and increased competition. In a soft market, intense competition among insurers leads to lower premiums and more relaxed underwriting standards.

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