AD Banker Comprehensive Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Enhance your exam readiness with the AD Banker Comprehensive Exam guide. Includes flashcards and multiple-choice questions with explanations.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the minimum capital required to form and organize a new domestic stock life insurance company in Alabama?

$500,000
$1,000,000
$50,000
$2,000,000

The correct answer is: $1,000,000

The minimum capital required to form and organize a new domestic stock life insurance company in Alabama is $1,000,000. This requirement is set to ensure that the company has sufficient financial resources to operate effectively and to meet its obligations to policyholders. The capital serves as a buffer to protect against financial instability and ensures the company can support its initial operations, including underwriting policies and managing claims. This level of capital is reflective of the substantial risks involved in providing life insurance coverage and the regulatory standards that aim to protect consumers. By establishing a higher threshold, the state of Alabama ensures that new insurance companies have a solid financial foundation before they begin to offer products to the public.