Question 1

What must be properly coded to meet the statutory reporting requirements of the annual statement and to provide statistics to support filling?

Accepted Answer

A)  Claims data 
B)  Insurance act 
C)  Risk estimation 
D)  Claim settlement

Question 2

An entity's practices concerning loss settlement, such as a practice of vigorously defending suits or of quickly settling suits, can have a significant effect on an entity's loss experience.

Accepted Answer

A) True 
 B)False

Question 3

Short-term portfolios are:

Accepted Answer

A)  Portfolios consisting of liabilities with maturities of one year to meet dollar needs. 
B)  Portfolios consisting of combined revenues of less than one year to meet liquidity needs. 
C)  Portfolios consisting of assets with maturities of less than one year to meet liquidity needs. 
D)  Portfolios consisting of expenses with maturities of less than or equal to one year to meet dollar needs.

Question 4

A basic premise underlying the application of is that it is reasonable to assume that plausible relationships among data exist and continue in the absence of known conditions to the contrary.

Accepted Answer

A)  Independent estimates 
B)  Statistical claims 
C)  Analytical procedures 
D)  None of the above

Question 5

In which account current, for individual policies, the agent collects the premiums directly from the insureds, subtracts his or her commissions and remits the net premiums due to entity?

Accepted Answer

A)  Billing basis 
B)  Paying commission basis 
C)  Item basis 
D)  Bushiness costs

Question 6

________ are contracts with the insurer which provide for periodic payments over a specified period or in specified amounts. In most respects they are administered and accounted for much like supplementary contracts without life contingencies since there are no mortality or morbidity considerations that affect the amount to be paid.

Accepted Answer

A)  Mixed stream 
B)  Annuities certain 
C)  Annuities due 
D)  Ordinary Annuities

Question 7

A substantial investment is defined as any investment comprising more than 15 percent of an enterprise's voting shares or greater than 35 percent of its equity.

Accepted Answer

A) True 
 B)False

Question 8

Uncollected premiums

Accepted Answer

A)  Are also an asset in statutory accounting 
B)  Are usually those past the due date but in the grace period 
C)  Accounting is similar to that for deferred premiums in that only the net premiums are necessary to match the reserve liability 
D)  Only A and B

Question 9

The maturity of which agreement is fixed by the contract and depends on the needs of the borrower and the willingness of the lender?

Accepted Answer

A)  Fixed agreement 
B)  Standard agreement 
C)  Short-term agreement 
D)  Repurchase agreement

Question 10

The value of the capital stock shown in the stock life insurance company's statutory basis balance sheet equals the par value per share multiplied by the number of issued shares. In the case of no-par stock:

Accepted Answer

A)  The stated value per share is used (or liquidation value, for no-par preferred capital stock) 
B)  The Total value of shares is used (or liquidation value, for par preferred capital stock) 
C)  The market value per share is used (or liquidation value, for no-par preferred capital stock) 
D)  Capital stock may be sold to the public for an amount greater than par or stated value

Question 11

In which policies the contract provides for insurance coverage for a fixed period of duration and enables the insurer to not renew the contract or adjust the provisions of the contract at the end of the contract period?

Accepted Answer

A)  Short duration 
B)  Policy duration 
C)  Contract duration 
D)  None of the above

Question 12

Structured settlements are agreements characterized by the periodic payment of fixed amounts to a claimant in connection with the settlement of a legal claim. Such payments may last for the lifetime of the payee or they may be for a particular period of time, depending upon the terms of the settlement. The party responsible for making structured settlement payments may make payments:

Accepted Answer

A)  Directly 
B)  To a claimant 
C)  Any one of these 
D)  None of these

Question 13

Audit risk consists of:

Accepted Answer

A)  Risk of material misstatement 
B)  detection of risk 
C)  Both A & B 
D)  Neither A nor B

Question 14

Insurance agents act as contractors in groups who express one or more entity with express authority to act for the entity in dealing with insureds.

Accepted Answer

A) True 
 B)False

Question 15

For reinsurance assumed, the concepts analogous to attachment points and limits are referred to as

Accepted Answer

A)  Severity Levels 
B)  Frequency Levels 
C)  Policy levels 
D)  Retention levels

Question 16

To meet informational demands, internal management reporting will entail alternate views of the organization's financial performance. These areas, or views, are including all of the following EXCEPT:

Accepted Answer

A)  organizational/ business unit (Profit center, department, distribution system etc) 
B)  Dealing with processes; product or service lines (i.e. ordinary life insurance, pension services like deferred annuities, group risks such as life or accident and health, etc.) 
C)  Dealing with similar risks or characteristics; and customer segment (i.e. individuals with specific levels of net worth, small businesses, large corporations, etc.) 
D)  None of these

Question 17

Accounting transactions that occur after the initial investment in a loan and during the period the loan is being serviced fall into two broad categories. Which one of the following is out of those categories?

Accepted Answer

A)  Processing transactions, which are recurring and similar in nature for all mortgage loans, 
B)  processing transactions, which are not recurring and opposite in nature for all mortgage loans 
C)  Unusual transactions 
D)  None of these

Question 18

Which of the following is NOT the interrelated component of internal control?

Accepted Answer

A)  Control environment 
B)  Risk assessment 
C)  Control activities 
D)  Planning control

Question 19

In which plan all activities writing automobile insurance in a state are allocated a share of the involuntary business on an equitable basis?

Accepted Answer

A)  Automobile equitability 
B)  Automobile insurance 
C)  Automobile assurance 
D)  None of the above

Question 20

Which of the following is the objective to the evaluation and risk-accepting function?

Accepted Answer

A)  Evaluating and acceptability of risk 
B)  Determining the premium 
C)  Evaluation of entity's capacity to retain risk 
D)  All of the above

Exam 1: Accredited Financial Examiner

What must be properly coded to meet the statutory reporting requirements of the annual statement and to provide statistics to support filling?

An entity's practices concerning loss settlement, such as a practice of vigorously defending suits or of quickly settling suits, can have a significant effect on an entity's loss experience.

Short-term portfolios are:

A basic premise underlying the application of is that it is reasonable to assume that plausible relationships among data exist and continue in the absence of known conditions to the contrary.

In which account current, for individual policies, the agent collects the premiums directly from the insureds, subtracts his or her commissions and remits the net premiums due to entity?

A substantial investment is defined as any investment comprising more than 15 percent of an enterprise's voting shares or greater than 35 percent of its equity.

Uncollected premiums

The maturity of which agreement is fixed by the contract and depends on the needs of the borrower and the willingness of the lender?

The value of the capital stock shown in the stock life insurance company's statutory basis balance sheet equals the par value per share multiplied by the number of issued shares. In the case of no-par stock:

In which policies the contract provides for insurance coverage for a fixed period of duration and enables the insurer to not renew the contract or adjust the provisions of the contract at the end of the contract period?

Audit risk consists of:

Insurance agents act as contractors in groups who express one or more entity with express authority to act for the entity in dealing with insureds.

For reinsurance assumed, the concepts analogous to attachment points and limits are referred to as

To meet informational demands, internal management reporting will entail alternate views of the organization's financial performance. These areas, or views, are including all of the following EXCEPT:

Accounting transactions that occur after the initial investment in a loan and during the period the loan is being serviced fall into two broad categories. Which one of the following is out of those categories?

Which of the following is NOT the interrelated component of internal control?

In which plan all activities writing automobile insurance in a state are allocated a share of the involuntary business on an equitable basis?

Which of the following is the objective to the evaluation and risk-accepting function?