SOFE SOFE Certifications SOFE-CFE Questions & Answers

• Question 141:

  Which policy covers losses reported during the policy period rather than when they occurred?

  A. case reserve

  B. case average

  C. claims-made

  D. reported claim

  Correct Answer: C

• Question 142:

  ___________ is the sale of damaged goods, for which the insured has been indemnified by the company.

  A. Salvage

  B. Loss offset

  C. Reevaluation

  D. None of the above

  Correct Answer: A

• Question 143:

  What is based on the principle that for a service rendered (i.e., the payment of the indemnity claim), the insured assigns to the insurer any rights that may inure to the insured from third parties.

  A. Salvage

  B. Indemnity payment

  C. Subrogation

  D. Reinsurance resource

  Correct Answer: C

• Question 144:

  Expenses that are identified by the state and coverage code of the related claim to properly match the costs to the policy and earned premium are called:

  A. Loss adjustment expense

  B. Defense and Cost Containment

  C. Adjusting and Other

  D. Surveillance expense

  Correct Answer: B

• Question 145:

  Loss reserves that are not established on a claim number basis are identified as bulk reserves.

  A. True

  B. False

  Correct Answer: A

• Question 146:

  The bulk reserves are used when statistical analysis indicates that the ultimate development of the original reserves will be deficient are called:

  A. Claims-made reserves

  B. Supplemental reserves

  C. Reopened claim reserves

  D. Claims-in-transit

  Correct Answer: B

• Question 147:

  Which of the following is the component of loss and loss adjustment liabilities are used in meeting the challenge?

  A. case reserves

  B. supplement reserves

  C. reopened claim reserves

  D. All of the above

  Correct Answer: D

• Question 148:

  The purpose of the ______________ is to provide equitable settlements with claimants as well as to control the insurer's claim costs from economic and social inflation.

  A. Annuity method

  B. Casualty control method

  C. periodic payment method

  D. Loss reserves

  Correct Answer: A

• Question 149:

  What is the total amount of checks, wire transfers or drafts issued in settlement of claims for the risks insured by the company?

  A. Traditional settlements

  B. Losses paid

  C. Secured claims payment

  D. Short-tail claims payment

  Correct Answer: B

• Question 150:

  Since the periodic payments agreed to by the parties are scheduled into the future, the arrangement is often referred to as:

  A. Traditional claim settlement

  B. Losses paid settlement

  C. Secured claims settlement

  D. structured claims settlement

  Correct Answer: D