Abstract
THE PRINCIPAL BUSINESS of a property and casualty company is to provide protection in the form of service and financial responsibility. The primary purpose of the investment manager of the company is to protect policyholders' funds. Investment policy is coordinated with the financial requirements of the insurance operations with a view of achieving satisfactory income and protection for reserve funds while at the same time conserving and, when possible, increasing shareholders' equity. The industry is state regulated and minimum capital requirements are determined by state insurance laws. However, these requirements are quite modest and are met many times over by the large property and casualty companies so that they have little bearing on investment policies. Over and above legal requirements the main function of the investment operation is to invest employable funds to obtain the maximum income and appreciation with a minimum amount of risk. Implementation of this basic policy is, of course, the main function of investment managers. There are certain financial guidelines that these institutions usually follow. It naturally varies among the different companies but, in general, these guidelines are the basis for investment programs.
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