Question
What is the safety margin that insurers must maintain to safeguard the interests of policyholders called?
Solution
Explanation: The solvency margin is the safety cushion that insurance companies are required to maintain to ensure that they have sufficient financial resources to cover potential losses and meet their obligations to policyholders. It helps protect policyholders' interests by ensuring that the insurer remains financially stable and capable of fulfilling its commitments.
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