What do not contribute to an insurer's solvency as measured by statutory accounting requirements?

Question

Options

• ANon-determined assets
• BNon-admitted assets
• CUnacknowledged assets
• DDisallow assets

• A
  7% (3)
• B
  76% (34)
• C
  13% (6)
• D
  4% (2)

Explanation

Non-admitted assets (B) are excluded from an insurer's statutory balance sheet entirely. Under statutory accounting principles (SAP), regulators only count assets that are readily convertible to cash to pay policyholder claims - non-admitted assets (e.g., furniture, prepaid expenses, certain receivables) are deemed insufficiently liquid or reliable, so they are deducted from surplus and do not count toward solvency.

Why the distractors are wrong: "Non-determined assets," "unacknowledged assets," and "disallow assets" are not recognized terms in statutory accounting or insurance regulation - they are fabricated distractors designed to confuse. The specific, technical term used by regulators and the NAIC is non-admitted.

Memory tip: Think of "admitted" as being admitted into the room - only assets the regulator lets in (admits) count toward solvency. Non-admitted assets are left outside the door. If you see any other phrasing that isn't "non-admitted," it's almost certainly a distractor.

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