SOFE SOFE-AFE Online Practice Questions and Exam Preparation

SOFE SOFE-AFE Online Questions & Answers

• Question 91:

  What is considered "pure" mortality protection?

  A. Life insurance
  B. Premium plan
  C. Transience policy
  D. Assurance plan
  A. Life insurance

• Question 92:

  A Company's investments are admitted assets properly valued which support the reserves and liabilities, including required capital and surplus. Many jurisdictions permit companies to make some investments that do not meet all of the strict regulatory requirements. These additional investments are often referred to as basket assets. Which of the following is/are true for Basket assets?

  A. They have been made out of a company's free surplus
  B. Mortgage loans are first liens on the property backing them. Second or third-lien mortgages typically qualify as "basket" loans
  C. A particular entity can obtain this benefit
  D. They record investment and number of mortgages on which interest has been reduced, and the percent the interest was reduced
  A. They have been made out of a company's free surplus
  B. Mortgage loans are first liens on the property backing them. Second or third-lien mortgages typically qualify as "basket" loans

• Question 93:

  Sales of securities are recorded as of the trade date. A receivable due from the broker is established in instances when a security has been sold, but the proceeds from the sale have not been received. Receivable for securities not received within settlement date are non-admitted, and are classified as other than invested assets.

  A. 15 days
  B. 30 days
  C. 35 days
  D. 90 days
  A. 15 days

• Question 94:

  The financial statements of which accounts maintained by insurance company that must be presented separately from the insurance company's general account business?

  A. Business
  B. Temporal
  C. Principal
  D. Segregated
  D. Segregated

• Question 95:

  The deduction must be based on identification of specific doubtful amounts and is limited to the maximum of doubtful debts identified in the year or a preceding year and 75 percent of the amount reported for statutory purposes.

  A. True
  B. False
  B. False

• Question 96:

  Prepayment of a conventional mortgage loan, prior to its specified maturity, is discouraged through the general market acceptance of significant prepayment penalties. Often these penalties are calculated so that when prevailing market interest rates are:

  A. Lower than the rate on the loan being repaid the borrower has to make up the interest rate differential and the lender is essentially "made whole" for a potential loss of interest.
  B. Greater than the rate on the loan being repaid the borrower has to make up the interest rate differential and the lender is essentially "made whole" for a potential loss of interest.
  C. Equal to the rate on the loan being repaid the borrower has to make up the interest rate differential and the lender is essentially "made whole" for a potential loss of interest.
  D. Lower than the rate of interest being paid to the borrower has to make up the interest rate differential and the lender is essentially "made whole" for a potential loss of interest.
  A. Lower than the rate on the loan being repaid the borrower has to make up the interest rate differential and the lender is essentially "made whole" for a potential loss of interest.

• Question 97:

  What are especially effective in investment strategy, because of the powerful risk management attributes they provide?

  A. Investments trials
  B. Product design
  C. Communication benefits
  D. Derivative instruments
  D. Derivative instruments

• Question 98:

  The profitability of an insurance entity on a statutory basis is generally gauged by:

  A. combined ratio and its operating ratio
  B. single module ratio and its operating ratio
  C. Net ratio
  D. Gross ration and actual ratio
  D. Gross ration and actual ratio

• Question 99:

  An instrument that grants the holder the right but not the obligation to buy the underlying asset at a specified strike price is known as:

  A. Sell Option
  B. Call Option
  C. Buy Option
  D. None of the above
  B. Call Option

• Question 100:

  In the NAIC Accounting Practices and Procedures Manual there is limitation on the amount of EDP equipment and operating systems software, that can be shown as admitted assets. Companies are generally limited to of the reporting entity's capital and surplus, as reported in the financial statement most recently filed with the domiciliary commissioner adjusted to exclude any EDP and operating system software, net deferred tax assets and positive goodwill.

  A. Four percent
  B. Three percent
  C. Five percent
  D. Seven percent
  D. Seven percent