SOFE SOFE Certifications AFE Questions & Answers

• Question 61:

  The sum of values assigned by claims adjusters to specific known claims that were recorded by the insurance entity but not yet paid at the financial statement date is called:

  A. case-basis reserves

  B. computing reserves

  C. aggregate reserves

  D. None of the above

  Correct Answer: A

• Question 62:

  The difference between the case-basis reserves and the estimated ultimate cost of such recorded claims is known as:

  A. projected reserves

  B. computing reserves

  C. case-development reserves

  D. claim reserves

  Correct Answer: C

• Question 63:

  What allows an entity to eliminate the reserve that was recorded for the claim, even if it exceeded the amount paid for the settlement?

  A. ethical act

  B. controlled procedure

  C. structured settlement

  D. None of the above

  Correct Answer: C

• Question 64:

  Changes in payment procedures or changes in the definition of payment date for coding purposes may or may not affect loss reserve developments.

  A. True

  B. False

  Correct Answer: B

• Question 65:

  For purposes of establishing an appropriate financial statement reserve, the most important factors to consider are:

  A. the historical adequacy

  B. consistency in the reserving approach

  C. availability of statistical analysis of reserves

  D. All of the above

  Correct Answer: D

• Question 66:

  Subrogation is:

  A. legal right of the distributer to recover from vendors who may be wholly responsible for the loss paid under the terms of the agreement.

  B. legal right of the insurer to recover from a third party who may be wholly or partly responsible for the loss paid under the terms of the policy.

  C. legal right of the claimer to recover from the organization that may be wholly or partly responsible for the loss paid under the terms of the company's policy.

  D. legal right of the business to recover from a third party who may be wholly responsible for the loss paid under the terms of the policy.

  Correct Answer: B

• Question 67:

  Claims adjusting involve:

  A. a field work

  B. an appraisal of risk subject to appropriate supervision

  C. approval by entity's claims department

  D. All of the above

  Correct Answer: C

• Question 68:

  _______ is contractual right of recovery that entitles the insurer to any proceeds from the disposal of damaged property for which the claim has been made.

  A. Claim adjustment

  B. Claim recovery

  C. Subrogation

  D. Salvage

  Correct Answer: D

• Question 69:

  What must be properly coded to meet the statutory reporting requirements of the annual statement and to provide statistics to support filling?

  A. Claims data

  B. Insurance act

  C. Risk estimation

  D. Claim settlement

  Correct Answer: A

• Question 70:

  Which of the following in NOT the flow of transaction through the claims cycle?

  A. Quick-tail lines claim acceptance

  B. Insurance underwritten

  C. Claim settlement

  D. Loss reserve evaluation

  Correct Answer: B