SOFE SOFE Certification SOFE-CFE Questions & Answers

• Question 161:

  The in-force method requires the computation of which premium charges?

  A. for the amount charged the insured

  B. for the in-force premiums

  C. both A and B

  D. Neither A nor B

  Correct Answer: C

• Question 162:

  Under which method of calculating unearned premium reserves, the amortization procedure uses the written premiums for the full term of the policy, or for any additional premium paid.

  A. Direct

  B. Indirect

  C. In-force

  D. Effective data-recovery

  Correct Answer: A

• Question 163:

  What requires the full-term premium for each policy that has not expired at the Annual Statement date be determined?

  A. in-force premium method

  B. stability of premium investor

  C. premium period

  D. Gross premium rated reinsurance

  Correct Answer: A

• Question 164:

  Premium which is earned as written is called monthly premium.

  A. True

  B. False

  Correct Answer: A

• Question 165:

  The premium which is earned over the contract period in relation to the expiration of risk is known as:

  A. monthly premium

  B. annual premium

  C. single premium

  D. None of the above

  Correct Answer: C

• Question 166:

  What is determined by the changing nature of the insurance protection provided over the contract period?

  A. insurance contract

  B. credit accident

  C. actuarial method

  D. financial insurance

  Correct Answer: C

• Question 167:

  Which of the following premium payment plans are generally offered by mortgage guaranty insurers?

  A. monthly premiums

  B. annual premiums

  C. single premium

  D. All of the above

  Correct Answer: D

• Question 168:

  Requiring the expense items relating to policy issuance to be expensed as a period cost at the time the policy is written is called:

  A. Statutory accounting

  B. Casualty insurance

  C. Refund premiums

  D. Recognize expense

  Correct Answer: A

• Question 169:

  Which of the following is Correct?

  A. Under the monthly pro rata method, the policy year is divided into two equal parts, with the first month and the last month of the policy year earning only 1/2 of the premium.

  B. Under the monthly pro rata method, the policy year is divided into twelve equal parts, with the first month and the last month of the policy year earning only 1/12 of the premium.

  C. Under the monthly pro rata method, the policy year is divided into twenty-four equal parts, with the first month and the last month of the policy year earning only 1/24 of the premium.

  D. Under the monthly pro rata method, the policy year is divided into forty-eight equal parts, with the first month and the last month of the policy year earning only 1/48 of the premium.

  Correct Answer: C

• Question 170:

  Which of the following is the correct formula to calculate the earned premium?

  A. Earned premium = (Policy premium x Unexpired coverage days) / Total number of days in the policy

  B. Earned premium = (Interest premium + Unexpired coverage days) / Total number of days in the policy C. Earned premium = (Policy premium x expired coverage days) / Total number of days in the policy

  D. Earned premium = (Overhead premium _ Unexpired coverage days) / Total number of days in the policy

  Correct Answer: C