Which item is included in Underwriting & Investment Expenses?

• A. Advertising expenses
• B. Policyholder dividends
• C. Commission & brokerage expenses
• D. Reinsurance premiums

Answer: (C)

Underwriting & Investment Expenses are costs tied to obtaining and servicing insurance policies and managing investments. Commissions and brokerage expenses fit this category because they are fees paid to agents and brokers to produce and place business, directly supporting underwriting activity. Advertising is a marketing cost and not the same as the underwriting expense category here. Policyholder dividends are distributions to policyholders, not costs, and reinsurance premiums relate to transferring risk to reinsurers and are typically shown separately as ceded costs rather than underwriting & investment expenses. So, commissions & brokerage expenses are the item that belongs in this category.