SOFA-CFE Exam Questions

The development and payment patterns associated with reported claims can be used to estimate the other loss liability components commonly called:

The formula to calculate Losses incurred for the accounting period is:

What is the total amount of checks, wire transfers or drafts issued in settlement of claims for the risks insured by the company?

Since the periodic payments agreed to by the parties are scheduled into the future, the arrangement is often referred to as:

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.

Which of the following is the component of loss and loss adjustment liabilities are used in meeting the challenge?

Loss reserves that are not established on a claim number basis are identified as bulk reserves.

The bulk reserves are used when statistical analysis indicates that the ultimate development of the original reserves will be deficient are called:

Which policy covers losses reported during the policy period rather than when they occurred?

___________ is the sale of damaged goods, for which the insured has been indemnified by the company.

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...

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:

Loss Notification, Coverage Triggers, Data Maintenance/Accuracy are all categories of:

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?

A ____________ places the occurrence of the loss in one policy period even if the occurrence of the damage spanned a larger period of time.

The trigger is the assertion of a claim rather than the occurrence of the injury.

Transaction Code, Class of Risk, Line of Business, and Policy Expiration Date are all claim data elements of a company's:

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.

What is used as the control for the company's financial information?

The accrual or reserve for anticipated salvage and subrogation receipts would be recorded in which account?

What is a negotiable instrument that is accepted by the bank only upon the approval of the payor?

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:

What provides the insurance company with the ability to electronically send the bank daily listings of issued checks?

Which reports are also generated to indicate results from each rein surer by policy year or accident year?

There are two periods of time over which claims are analyzed:

Property-casualty insurance companies derive investment income from which of the following primary source?

The price of money consists of which elements?

In the financial community, unsecured promissory notes of corporations are known as:

What provide yields competitive with commercial paper, are interest-bearing instruments issued by banks?

The bills that are sold at a discount to face value to yield the market rate over their life are called:

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...

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...

The intrinsic value of money, referred to as the real interest rate by economists.

Dollar repurchase agreements are commonly referred to as dollar roll transactions.

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...

What are corporate obligations considered having a higher default risk and a lower credit rating?

The bonds, which are backed by the full faith and credit of the issuing body is called:

Insurance companies sometimes issue instruments that have the characteristics of both debt and equity; these instruments are commonly referred to as:

Which bonds have interest payment coupons attached, which are presented to the issuer to obtain payments of interest?

If the effective yield is lower than the nominal yield, the buyer will pay a:

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...

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...

Premium paid for which bonds will be written off immediately to prevent a negative yield from being generated?

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:

An insurance company may invest in common stocks in order to:

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?

___________ 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.

Under the terms of organized securities markets, purchases should be settled in how many working days?

Occasionally, the number of shares outstanding may be reduced, which is referred to as:

SCA stocks (affiliated) are valued using which of the following methods: