SOFA-CFE Exam Questions

The basis for establishing what is found in the firm's management organization chart which documents the reporting relationships and the responsibilities of its executives?

What is the quantitative expression of the cost of the resources required to attain the objectives of the plan, as well as an indication of where in the organization and in what fo...

Which of the following is the source of variance that will help management (when understood in terms of the relationship among the many interacting components in a plan) are these?

What is carried to the Exhibit of Net Investment Income, and used in calculating net investment income earned for the year?

What bypasses the overhead allocation questions and focuses on the relation of variable cost variances?

Issuance of a duplicate or replacement check without voiding the original entry can result in paying a claim twice - once to the claimant and again to:

What is an agreement by which a transferor increases its surplus to policyholders by the transfer of loss obligations already incurred in excess of the consideration paid?

An insurance-linked security can be issued by a property-casualty insurer through:

Reinsurance is the acceptance by one insurer, known as the reinsurer or the ______________, of all or part of the risk of loss of another (the original) insurer, called the _______...

Which of the following is NOT the type of reinsurers?

Which of eth following is the distribution channel a reinsurer may use to write its business?

What protects the insurance company's reported results and financial position from a severity of loss?

The primary function of reinsurance is to increase the ceding company's __________to accept larger exposures than it would ordinarily be able to accept.

Over the long-term, the leveling effect for the reinsured is accomplished; however, the reinsurer frequently sustains significant losses in any one or several years, this leveling...

What unwinds or is reversed in the subsequent year as the ceded premium is earned?

What is a form of reinsurance whereby the reinsurers and the reinsured both share a proportional part of the original premiums?

What provides that the reinsurer assumes an agreed percentage of each risk being insured, sharing all premiums and losses accordingly with the reinsured?

Which of the following is the type of excess of loss reinsurance?

Which is one form of reinsurance that provides both horizontal and vertical protection?

____________ is the reinsurance of part or all of (the insurance provided by) a single policy, with separate negotiation for each cession.

A ceding company may purchase what in order to provide economic and surplus protection from a certain catastrophic exposure in lieu of a reinsurance agreement?

There could be a difference between the actual loss incurred by the ceding company for the catastrophe event and the contractual recovery afforded under the Industry Loss Warranty...

Deposits associated with contracts that transfer only timing risk or transfer neither timing nor underwriting risk shall be measured using the:

What is an agreement that releases the reinsurer of all its obligations under the original reinsurance agreement for a negotiated consideration as a final settlement?

Proportional reinsurance is defined as pro rata reinsurance.

What reinsurance is defined as reinsurance excess of retention by the ceding company?

A primary insurer has a higher frequency of loss among its policyholders or claimants than a reinsurer has among its ceding companies.

What refers to a reinsurance arrangement which involves a 100 percent cession of a company's block of business at a certain time?

A retrocession is a transaction whereby a reinsurer, called the retrocedent, cedes to another reinsurer, known as the retrocessionaire.

What may be determined as a percentage of the subject base premium, a flat rate, or a rate developed by the reinsured's loss experience?

Because premiums for a reinsurer typically are not fully earned when received, provision is made for recording premiums in which of the following stages of development?

Which of the following is Correct?

What are defined as losses paid plus the change (positive or negative) in outstanding loss reserves within a given period of time?

The change in reserves equals the gross losses unpaid (liability) at the end of the period less net unpaid losses at the beginning of the period.

A __________________ reflects the actual profit developed under the contract.

Income is usually measured by premium earned while outgo is the sum of losses and loss adjustment expenses incurred, commissions incurred, and an expense fee.

Which of the following provides specific information regarding reinsurance assumed and ceded, is an integral part of the Annual Statement?

What must be unconditional, irrevocable, and contain an evergreen clause that automatically renews in the absence of prior written notice of non-renewal?

The penalty for reinsurance is carried as a liability in the balance sheet and is a hybrid of:

What is defined as the difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amoun...

Financial statement carrying amount exceeds tax basis for assets in:

Financial statement carrying amount exceeds tax basis for liabilities in:

Gains and losses are recognized for tax purposes until they are realized.

Which payments are not deductible in the year of accrual and only taken as a tax deduction when paid, unless the payment is made within 2fi months following the year of accrual?

Events recognized in the financial statements that do not have tax consequences are commonly referred to as:

Permanent differences affect current and deferred balances; temporary differences only affect tax expense.

Which of the following is NOT the step in determining deferred tax assets and liabilities?

A deferred tax asset for deductible temporary differences expected to be realized by carry-back would be measured using the tax law and rates for the year in which the refund is ex...

The evaluation of the realizability of ___________assets is made on a gross as opposed to a net basis

Which if the following is the possible source of taxable income may be available under the tax law to realize a tax benefit for deductible temporary differences and carryforwards?