SOFA-CFE Exam Questions

What are generally made on the security of buildings and land?

Some mortgages provide for a lump sum payment of part of the principal upon maturity; this lump sum is known as:

Which appraisal is defined as an appraisal no more than five years old?

_____________are agreements to buy, sell, effect cash settlement or otherwise exchange securities based on the performance, market price, interest rate, currency price, etc. of an...

An agreement giving the buyer the right to receive, sell or effect a cash settlement based on the actual performance of an underlying interest is called:

An agreement obligating the seller to effect cash settlement to the buyer if the specified underlying interest exceeds a predetermined level of performance is known as:

An agreement obligating the seller to effect cash settlement to the buyer if the specified underlying interest does not exceed a predetermined level of performance is referred to a...

An agreement to receive payments as the buyer of an option, cap, or floor and to make payments as the seller of a different option, cap, or floor is called:

A swap is an agreement between two or more parties to exchange payments based on the performance of underlying interests.

An agreement (other than a future) to exchange, at a specified future date and price, underlying interests is called:

A futures contract is an agreement traded on an exchange or contract market to buy, sell, or effect cash settlement based on the performance of an underlying interest.

Which of the following is Correct?

An option to sell a particular stock at a fixed price within a stated period of time is called:

An option to buy a particular stock at a fixed price within a stated period of time is known as:

Which taxes are not reported as part of investment income, but are instead reported as a component of surplus through unrealized gains and losses?

What defines and sets guidelines for the types and percentages of invested assets that insurers are permitted to own?

What relies on the insurer to use reasonable judgments to determine the types and percentages of assets being acquired?

Any company more than half of the business of which during the taxable year is the issuing of insurance or annuity contracts or the reinsuring of risks is referred to as:

Which insurance arrangement, which involved insurance of a loss that had previously occurred, similarly was found not to be insurance for federal income tax purposes?

To qualify as a life insurer for federal income tax purposes, what percent of the mean of the company's reserves must constitute life insurance reserves?

____________ has been unwilling to accept the Annual Statement method of accounting as inherently binding.

Bituminous Casualty Corp. affirmed the propriety of treating what as an unearned premium reserve, which results in the reduction of underwriting income.

What must be calculated by using a prescribed method that usually results in amounts different from the Annual Statement?

Annual Statement methodology should be followed in computing insurance company taxable income except when the tax law does not permit insurers to do so.

A nonlife insurance company's basic tax formula is roughly equivalent to the standard corporate tax formula, with which of the following insurance specific modifications:

Premium income is deferred by 80 percent of the increase in the reserve for _________ premiums that applies to the unexpired period of an insurance contract

15 percent of otherwise tax exempt interest income and the dividends received deduction are included in the company's income, in which factor?

What begins with gross premiums written and are reduced by return premiums and premiums paid for reinsurance?

Written "amounts payable" for insurance coverage are called:

Spreading the deduction for ultimate incurred losses and loss adjustment expense reserves ("LAE") over a number of years is called:

The discounted unpaid loss as of the end of any tax year is the present value of losses determined by reference to which of the following factor?

The base period is defined as:

A rate based on the average market yield on outstanding obligations of the United States with maturities between three and nine years, and it is published monthly is known as:

"Industry" discount factors are computed and published by the Treasury annually and are based on which of the following factor?

Non-proportional reinsurance is reported on which one of the following three lines:

Taxable years of insurers for periods other than calendar years can occur in which way?

Dividends generally constitute gross income, and dividends received from domestic corporations are eligible for which dividends?

The attorney-in-fact manages the ___________ and is paid a fee or commission for management services rendered.

What is designed to report information about an insurance company's ability to meet its obligations to policyholders and claimants, and focuses on surplus adequacy?

What is designed to meet the varying needs of the different users of financial statements, which is based on accrual accounting?

Certain assets that normally are recognized under GAAP are excluded from the statutory balance sheet and are referred to as:

Under _________________, assets are defined as probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

What permits all bonds "in good standing" to be carried at their amortized cost in the statutory balance sheet?

Insurance companies are required to write down all bonds not in good standing to what as assigned values by making charges to their statutory surplus through an entry to change non...

Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method including anticipated prepayments.

If an insurance company actively buys and sells bonds and does not intend to hold the bonds to maturity, bonds are reported at market values and temporary changes in the market val...

Furniture, fixtures and equipment, leasehold improvements, non-admitted assets, prepaid expenses are all adjustments required for:

If the subsidiary subsequently reports gross income, the insurer resumes applying the equity method only after its share of that gross income equals the share of net losses not rec...

What received from an investee are recognized in investment income when declared to the extent that they are not in excess of the undistributed accumulated earnings attributable to...

In general, a variable interest entity is subject to consolidation if it has: