SOFE AFE Exam Practice Test Instant Access

Question 1

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

Atransfer only significant timing risk

Btransfer only significant underwriting risk

Ctransfer neither significant timing nor underwriting risk

DAll of the above

Answer : D

Question 2

When no tax deductions are allowed if risks are not transferred, whereas premiums paid to insurers are tax deducible, this leads to the formation of:

APortfolio

BClaims

CCaptives

DFronting

Answer : C

Question 3

Average severities projection method uses various claim count and average cost per claim date on either a paid or insured basis.

ATrue

BFalse

Answer : A

Question 4

An annuity contract provides:

AEither immediately or at some future date, periodic income payments to one or more persons, perhaps with a certain guaranteed number of payments or with a minimum guaranteed amount for those annuities not having life contingencies

BEither immediately or at some future date, periodic income payments to one or more persons, perhaps with a certain guaranteed number of payments or with a minimum guaranteed amount for those annuities involving life contingencies

CEither immediately or at some future date, perpetual income payments to one or more persons, perhaps with a certain guaranteed number of payments or with a maximum guaranteed amount for those annuities involving life contingencies

DEither immediately or at some future date, periodic income payments to one or more persons, perhaps with a certain small number of payments

Answer : B

Question 5

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

ALiabilities

BExpenses

CRevenues

DNone of the above

Answer : C

Question 6

Schedule H retains the identity of the Group Accident and Health and the Credit Accident and Health lines of business. However, in Schedule H the line of business designated as Other Accident and Health is subdivided to identify individual policies or elective options. Which of the following is/are out of those classifications?

ACollectively Renewable

BCancelable

CGuaranteed renewable

DNon-renewable for market reasons only

Answer : A, C

Question 7

A package of coverage including most property and liability coverage except workers' compensation, automobile insurance and surely bonds is called:

ASingle peril

BMultiple peril

CProperty lines

Dprofessional property

Answer : B

SOFE Accredited Financial Examiner AFE Exam Practice Test