SOFE SOFE Certification SOFE-CFE Questions & Answers

• Question 391:

  Deposits associated with contracts that transfer only timing risk or transfer neither timing nor underwriting risk shall be measured using the:

  A. Appropriate Method

  B. Interest Method

  C. Intermediary decisions Method

  D. Reassumption offset Method

  Correct Answer: B

• Question 392:

  What is an agreement that releases the reinsurer of all its obligations under the original reinsurance agreement for a negotiated consideration as a final settlement?

  A. Statutory Act

  B. Accounting practices

  C. commutation

  D. None of the above

  Correct Answer: C

• Question 393:

  Proportional reinsurance is defined as pro rata reinsurance.

  A. True

  B. False

  Correct Answer: A

• Question 394:

  What reinsurance is defined as reinsurance excess of retention by the ceding company?

  A. Non-proportional

  B. Proportional

  C. Commutative

  D. Non-commutative

  Correct Answer: A

• Question 395:

  A primary insurer has a higher frequency of loss among its policyholders or claimants than a reinsurer has among its ceding companies.

  A. True

  B. False

  Correct Answer: A

• Question 396:

  What refers to a reinsurance arrangement which involves a 100 percent cession of a company's block of business at a certain time?

  A. variations

  B. portfolio

  C. proportionality

  D. premium reserves

  Correct Answer: B

• Question 397:

  A ceding company may purchase what in order to provide economic and surplus protection from a certain catastrophic exposure in lieu of a reinsurance agreement?

  A. Industry Loss Warranty Contract

  B. Proportional sharing contract

  C. Treaty standing agreement

  D. Excess of Loss contract

  Correct Answer: A

• Question 398:

  There could be a difference between the actual loss incurred by the ceding company for the catastrophe event and the contractual recovery afforded under the Industry Loss Warranty Contract, this risk is referred to as:

  A. absolute risk

  B. contract risk

  C. Loss adjustment risk

  D. basis risk

  Correct Answer: D

• Question 399:

  Which is one form of reinsurance that provides both horizontal and vertical protection?

  A. per risk excess of loss

  B. per occurrence excess of loss

  C. aggregate excess of loss

  D. None of the above

  Correct Answer: C

• Question 400:

  ____________ is the reinsurance of part or all of (the insurance provided by) a single policy, with separate negotiation for each cession.

  A. pro rata treaty

  B. Facultative

  C. aggregate placement

  D. None of the above

  Correct Answer: B