AFE Exam Questions

When policy periods expire, the premiums written are earned and are recognized as:

The pro rata portion of premiums written allocable to unexpired policy periods represents unearned premiums, which are reflected as in the balance sheet.

In which premium income less return premiums arising from policies issued by the entity collecting the premiums and acting as the primary insurance carrier?

When premium income less return premiums arising from policies issued or other contracts entered into reinsure other insurance entities that provide the related primary coverage ar...

Outgoing premiums less return premiums arising from reinsurance purchased from other insurance entities are called:

Which of the following is NOT the step of the transaction cycle?

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

At the end of each reporting period, unearned premiums are calculated and the change in unearned premiums is recorded as a charge or debit to premium income.

What is based on statistical data and are large groups of similar risks can be classified by a few and easily identifiable characteristics and result in standard rates?

______ is used when the rates for large or usual risks are established almost entirely by the skill and experience of the rate maker.

Which of the following is NOT the type of Merit rating?

Schedule rating:

The adjustments of the premium during the period of coverage based on actual experience during that same period are called?

What are batched, and input control totals are established before delivery to data entry?

The two basic methods for billing premiums are:

Insurance policies may be classified in which of the following categories?

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 cont...

If claims have been reported to the insurer after the contract period, it may several months for the insurer to investigate and establish a case reserve for reported claims.

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 e...

The agents submit to the insurance entity a statement of all policies issued or due during the current month, and the net amount of the statement is subsequently to be paid in acco...

Who is responsible for accounting for customer remittance advices and the agent's current account?

Changes in existing policies that may result in additional premiums or return premiums, such as increases or decreases in coverage limits, in:

______ an adjustment is based on experience of an individual risk during the term of the policy and is generally subject to maximum and minimum premium limits specified in the poli...

Home office record-maintenance methods may include:

A premium deficiency relating to which insurance contracts indicate a probable loss on premiums yet to be earned.

The method used to account for insurance and reinsurance contracts that do not transfer insurance risk is referred to as:

The subsequent measurement of the deposits is based upon whether the insurance and reinsurance contract:

In many states, a claims-made insurance policy is required to:

Primary coverage involves policies written between an insurer and a customer directly.

In processing ________, many entities keep a single file for each insured event, with separate identification of each claimant.

The method which assumes that an entity's experience in estimating case-basis reserves will be repeated in the future is called:

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 th...

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 e...

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

A lower net retention level typically would translate into a higher v:variability of reserves.

Which of the following is Correct?

What represents the amounts needed to provide for the estimated ultimate cost of settling claims relating to insured events that have occurred on or before a particular date?

The estimated liability includes the amount of money that will be used for future payments of:

Liabilities are recognized for known claims when sufficient information has been developed to indicate the involvement of a specific insurance policy.

Reporting investments, set requirements regarding matters such as location of asset and set limitations on investing in future are all prescribed by a method called:

Asset and liability management is:

Short-term portfolios are:

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 difference between the purchase price and the repurchase price, or sale price, plus accrued interest on the security represents:

As defined in Accounting Standards Codification, dollar purchase agreements are the agreements to sell and repurchase similar and identical securities.

Dollar rolls differ from regular repurchase agreements due to which of the following characteristics in the securities sold and repurchased.

The two most common types of dollar rolls are:

The securities repurchased have the same stated interest rate as, and maturities similar to, the securities sold and are generally priced to result in substantially the same yield...

In a yield-maintenance agreement:

What limits the repurchase price to a stipulated percentage of the face amount of the certificate?