American Bankers Association CTFA Exam - Topic 2 Question 34 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 34
Topic #: 2

[All CTFA Questions]

Investments in equities by a life insurance company may not exceed the total of

A70 percent of the insurance company's regulatory capital

B15 percent of the liabilities in respect of non-participating policies

C25 percent of the liabilities in respect of participating policies

DAll of the above

Show Suggested Answer

Suggested Answer: D

by Markus at Aug 02, 2022, 05:47 AM

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Jaclyn

4 months ago

Don't forget, it's all of the above!

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Kimbery

5 months ago

Wait, all of these limits apply at once? That seems a bit much.

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Tamar

5 months ago

Definitely agree with the 25% for participating policies!

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Orville

5 months ago

I thought it was only 15% for non-participating policies?

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Martha

5 months ago

A life insurance company can invest up to 70% of its regulatory capital.

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Cecilia

5 months ago

I vaguely remember that participating policies had a different limit, maybe 25%, but I can't remember the specifics for the others.

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Donte

5 months ago

I feel like the answer might be D, all of the above, but I can't recall the exact percentages for each type of policy.

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Jeff

5 months ago

I think I practiced a question similar to this, and it mentioned non-participating policies being capped at 15%.

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Linn

6 months ago

I remember something about investment limits for insurance companies, but I'm not sure if it's 70% of regulatory capital or something else.

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Timothy

6 months ago

The question mentions the "Calculate Withholding" program, so I'm guessing the pay status needs to be something related to withholding, like "W" for withholding.

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Mozelle

6 months ago

I'm a bit unsure about this one. The options seem pretty specific, so I'll need to think through each one to figure out which basic need life insurance can't fulfill.

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