SOFA-CFE Exam Questions
416 real SOFA-CFE exam questions with expert-verified answers and explanations. Page 2 of 9.
- Question #51
The development and payment patterns associated with reported claims can be used to estimate the other loss liability components commonly called:
- Question #52
The formula to calculate Losses incurred for the accounting period is:
- Question #53
What is the total amount of checks, wire transfers or drafts issued in settlement of claims for the risks insured by the company?
- Question #54
Since the periodic payments agreed to by the parties are scheduled into the future, the arrangement is often referred to as:
- Question #55
The purpose of the ______________ is to provide equitable settlements with claimants as well as to control the insurer's claim costs from economic and social inflation.
- Question #56
Which of the following is the component of loss and loss adjustment liabilities are used in meeting the challenge?
- Question #57
Loss reserves that are not established on a claim number basis are identified as bulk reserves.
- Question #58
The bulk reserves are used when statistical analysis indicates that the ultimate development of the original reserves will be deficient are called:
- Question #59
Which policy covers losses reported during the policy period rather than when they occurred?
- Question #60
___________ is the sale of damaged goods, for which the insured has been indemnified by the company.
- Question #61
What is based on the principle that for a service rendered (i.e., the payment of the indemnity claim), the insured assigns to the insurer any rights that may inure to the insured f...
- Question #62
Expenses that are identified by the state and coverage code of the related claim to properly match the costs to the policy and earned premium are called:
- Question #63
Loss Notification, Coverage Triggers, Data Maintenance/Accuracy are all categories of:
- Question #64
What is the summation of many claims triggered from a common event may have one general claim file and subsidiary files to contain the facts surrounding the individual claims?
- Question #65
A ____________ places the occurrence of the loss in one policy period even if the occurrence of the damage spanned a larger period of time.
- Question #66
The trigger is the assertion of a claim rather than the occurrence of the injury.
- Question #67
Transaction Code, Class of Risk, Line of Business, and Policy Expiration Date are all claim data elements of a company's:
- Question #68
In the case of an advance or partial payment, the loss reserve should not be adjusted to zero, but in cases of final payment, the loss reserve is adjusted to zero.
- Question #69
What is used as the control for the company's financial information?
- Question #70
The accrual or reserve for anticipated salvage and subrogation receipts would be recorded in which account?
- Question #71
What is a negotiable instrument that is accepted by the bank only upon the approval of the payor?
- Question #72
When the draft is received for acceptance from the bank, the liability that is debited and funds are transferred from the company's operating cash account to the bank is called:
- Question #73
What provides the insurance company with the ability to electronically send the bank daily listings of issued checks?
- Question #74
Which reports are also generated to indicate results from each rein surer by policy year or accident year?
- Question #75
There are two periods of time over which claims are analyzed:
- Question #76
Property-casualty insurance companies derive investment income from which of the following primary source?
- Question #77
The price of money consists of which elements?
- Question #78
In the financial community, unsecured promissory notes of corporations are known as:
- Question #79
What provide yields competitive with commercial paper, are interest-bearing instruments issued by banks?
- Question #80
The bills that are sold at a discount to face value to yield the market rate over their life are called:
- Question #81
The agreements under which the reporting entity purchases securities and simultaneously agrees to resell the same or substantially the same securities at a stated price on a specif...
- Question #82
The amount paid for the securities is reported as a short-term investment, and the difference between the amount paid and the amount at which the securities will be subsequently re...
- Question #83
The intrinsic value of money, referred to as the real interest rate by economists.
- Question #84
Dollar repurchase agreements are commonly referred to as dollar roll transactions.
- Question #85
For the seller in a _________________agreement, a liability is recorded for the amount of proceeds of the sale and the sold mortgage-backed securities are not removed from the acco...
- Question #86
What are corporate obligations considered having a higher default risk and a lower credit rating?
- Question #87
The bonds, which are backed by the full faith and credit of the issuing body is called:
- Question #88
Insurance companies sometimes issue instruments that have the characteristics of both debt and equity; these instruments are commonly referred to as:
- Question #89
Which bonds have interest payment coupons attached, which are presented to the issuer to obtain payments of interest?
- Question #90
If the effective yield is lower than the nominal yield, the buyer will pay a:
- Question #91
A process in which whereby an issuer floats a second bond issue and uses those proceeds to escrow a sufficient amount of U.S. Treasuries to ensure that a call date and price can be...
- Question #92
The instrument that involves a contract between two parties to exchange interest payments on a specified principal amount (referred to as the notional principal) for a specific per...
- Question #93
Premium paid for which bonds will be written off immediately to prevent a negative yield from being generated?
- Question #94
The amount paid plus or minus any premium or discount payment to date to adjust the value to par or face amount by maturity date is known as:
- Question #95
An insurance company may invest in common stocks in order to:
- Question #96
If the stock issue is non-cumulative it behaves like common stock in that if a company does not declare a dividend, who is not entitled to a payment?
- Question #97
___________ are usually issued together with a bond or preferred stock, which entitles the holder to buy a specific amount of common stock at a specific price.
- Question #98
Under the terms of organized securities markets, purchases should be settled in how many working days?
- Question #99
Occasionally, the number of shares outstanding may be reduced, which is referred to as:
- Question #100
SCA stocks (affiliated) are valued using which of the following methods: