Question

Under the Insurance Regulatory Information System (IRIS), an insurer with _______ or more ratios outside of the acceptable ranges can face additional regulatory scrutiny.

		one
		two
		three
		four
		five

Answer 1

CORRECT Answer is FOUR.

Justification:- There are 13 financial ratios which has been established by NAIC in order to assist the state insurance departments in their oversight of the financial condition of licensed U.S. insurance companies operating in their respective states. The Insurance Regulatory Information system is system introduced by NAIC which determines these ratios based on the data provided by the insurance companies.As per the IRIS if a ratio result falls outside the usual range of IRIS ratios it does not necessarily mean a failed result rather unusual values are considered a part of early monitoring system.

Generally, if four or more ratios of an insurance company falls outside  the usual range of the IRIS, the company will be subject to regulatory scrutiny.