SOFE SOFE-AFE Online Practice Questions and Exam Preparation

SOFE SOFE-AFE Online Questions & Answers

• Question 1:

  What is the purpose of consolidated financial statements?

  A. These statements are intended to reflect the financial position and results of operations of an economic entity rather than a legal entity.
  B. These statements are intended to ignore the financial position and results of operations of an economic entity rather than an unofficial entity.
  C. These statements are intended to reflect the financial position and results of operations of a credited entity rather than a supplemental entity.
  D. None of the above
  A. These statements are intended to reflect the financial position and results of operations of an economic entity rather than a legal entity.

• Question 2:

  Life insurance companies frequently make mortgage loans to affiliated companies (such as subsidiaries or companies owned by a common parent company) and to joint ventures in which the life insurance company is a joint venturer. The company must carefully examine:

  A. An affiliated company or joint venture and the transactions related to it
  B. The propriety of the accounting treatment for each loan to an affiliated company or joint venture and the transactions related to it
  C. The propriety of the accounting treatment for each loan
  D. None of these
  B. The propriety of the accounting treatment for each loan to an affiliated company or joint venture and the transactions related to it

• Question 3:

  What is applied to the sale of all or a block of an entity's insurance in force of another entity?

  A. Insurance impede
  B. Portfolio Reinsurance
  C. Poly-holder insurance
  D. Syndicated insurance
  B. Portfolio Reinsurance

• Question 4:

  The establishment of loss reserves generally requires considerable judgment and knowledge of the entity's business is known as:

  A. integration assessment
  B. procurement assessment
  C. qualitative assessment
  D. quantitative assessment
  C. qualitative assessment

• Question 5:

  Principal objectives of state statutes are: to investigate and settle some or all of the

  A. restrict investments of insurance entities
  B. prescribe methods of admitted asset recovery
  C. acquisition of risk-based capitals
  D. Both B and C
  A. restrict investments of insurance entities

• Question 6:

  Supplementary contracts may be issued by an insurer upon the termination of a life insurance contract that has been terminated by death, maturity, or surrender. The policyholder, if living or the beneficiary elects the option under which the proceeds are paid. The payment options usually available are:

  A. To receive a guaranteed fixed number of payments
  B. To receive payments of a certain amount until the proceeds are exhausted.
  C. To leave the proceeds with the insurer to earn interest with payment to be made at a later date.
  D. Any one out of these
  D. Any one out of these

• Question 7:

  Accounting transactions that occur after the initial investment in a loan and during the period the loan is being serviced fall into two broad categories. Which one of the following is out of those categories?

  A. Processing transactions, which are recurring and similar in nature for all mortgage loans,
  B. processing transactions, which are not recurring and opposite in nature for all mortgage loans
  C. Unusual transactions
  D. None of these
  A. Processing transactions, which are recurring and similar in nature for all mortgage loans,

• Question 8:

  Internal Control is:

  A. the process of controlling the impact of risk related events on a company
  B. the process of planning the processes in order to avoid risk related events to a company
  C. the process of designing the models to avoid risk related events on a company
  D. All of the above
  A. the process of controlling the impact of risk related events on a company

• Question 9:

  In _______________, an adjustment is based on experience of an individual risk during the term of the policy and is generally subject to maximum and minimum premium limits specified in the policy.

  A. Business recordkeeping
  B. Retrospective premium adjustments
  C. Premium transaction flow
  D. Adjusting premiums
  B. Retrospective premium adjustments

• Question 10:

  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
  A. Claims data