318 vs 340 Questions

(Did I hear correctly that the HP thing got changed because car insurance companies would insure for more if the car was classified as a performance car so they revamped the measuring system so they didn't classify as a performance car?)
Nope. The HP ratings were too much marketing silliness and for any sort of high output engines, things would be done like remove the alternator, the fan, the belts to the water pump and PS pump, cool air, no air cleaner, and so on and on, just to get the max possible HP in a quick test before the engine overheated. It did not accurately what an actual operational engine would do as configured and really used. A good explanation is below.

http://www.secondchancegarage.com/public/201.cfm