Unformatted text preview: because oF a new homeowners that combines tradiTonal homeowner’s coverage with insurance that pays o² the mortgage iF the insured dies or becomes totally disabled. Premiums wri³en have increased substanTally; new agents have been hired; and the company is considering expanding into addiTonal states. However, its growth has been hampered by statutory accounTng rules that required and insurer to write o² immediately its ´rst year acquisiTon expenses but do not allow Full recogniTon oF premium income unTl the policy period has expired. In premium income unTl the policy period has expired. In this case, explain how reinsurance will enable Property Insurance to conTnue to grow in an orderly Fashion. Reinsurance can be used to increase the insurance company’s underwri±ng capacity to write a new business, to stabilize profts, reduce the unearned premium reserve, and to provide protec±on against a catastrophic loss....
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- Fall '15
- insurance company, Home insurance, Unearned Premium Reserve