Alberta General Insurance Level 1 Practice Exam

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What is NOT a part of the regulatory guidelines to determine solvency?

  1. Minimum capital requirements

  2. The collectibility of accounts receivable

  3. The rate of return on investments

  4. Reserves review

The correct answer is: The rate of return on investments

Regulatory guidelines use minimum capital requirements, reserves review, and the collectibility of accounts receivable as metrics to determine solvency. However, the rate of return on investments is not considered a key factor in regulatory guidelines for determining solvency. While the rate of return on investments can impact a company's overall financial health, it is not a direct measure of solvency. Therefore, it is not included in the regulatory guidelines for determining solvency.