Question

Liabilities of insurance companies may include all but which of the following?

1. 1. Policy claims.
   2. Contract loans.
   3. Net policy reserves.
   4. Deposit-type contracts.
   5. Separate account business.

2. Which of the following is not considered Liabilities and Equity on a typical insurance company balance sheet?

3. 1. Net Policy Reserves
   2. Policy Claims
   3. Customer Deposits  
   4. Separate account Business
   5. Securities Owned

Answer 1

Answer 1-

According to the balance sheet of Insurance company, the following is shown in the liabilities section:-

• Policy claims
• Net policy reserve
• Deposit type contracts
• Separate account business

These all are a kind of liabilities for a insurance company as policy claim is paid in the future when the person claims, and just like it net policy reserve is also a kind of liabilities as it is a obligation to pay in future.

And Contract loans is shown in the Asset side of the insurance company. As Insurance company made the loan.

Answer-2(c) Customer deposit

According to the balance sheet of Insurance company, customer deposit is an asset as it increases the cash of Insurance company and is not considered in liabilities and equity of a typical insurance company balance sheet.