Which of the following statements about the licensing of insurance companies is (are) true?

I. A new capital stock insurer must meet minimum capital and surplus requirements, which vary by state and line of insurance.
II. The licensing requirements for insurance companies are less stringent than those imposed on most other types of firms.
A) I only
B) II only
C) both I and II
D) neither I nor II

ANSWER:

I. A new capital stock insurer must meet minimum capital and surplus requirements, which vary by state and line of insurance.