Multiple choice

Which of the following is/are correct?

  1. The entire surplus would be distributed to policyholders.

  2. The entire surplus would be distributed to shareholders.

  3. A portion of the surplus would be left for distribution to shareholders.

  4. All of the above

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Earned surplus is the sum of a company's profits, after dividend payments, since the company's inception. A portion of the surplus would be left for distribution to shareholders.