SOFE SOFE Certification SOFE-CFE Questions & Answers

• Question 411:

  Reinsurance is the acceptance by one insurer, known as the reinsurer or the ______________, of all or part of the risk of loss of another (the original) insurer, called the _______________.

  A. assuming company, insurance company

  B. assuming company, ceding company

  C. insurance company, assuming company

  D. Reimbursement Company, primary company

  Correct Answer: B

• Question 412:

  Issuance of a duplicate or replacement check without voiding the original entry can result in paying a claim twice - once to the claimant and again to:

  A. deposited cash

  B. service charges

  C. escheat fund

  D. aggregate write-ins

  Correct Answer: C

• Question 413:

  What is an agreement by which a transferor increases its surplus to policyholders by the transfer of loss obligations already incurred in excess of the consideration paid?

  A. Retroactive reinsurance

  B. Corporate expense

  C. Capital gains

  D. Foreign exchange commission

  Correct Answer: A

• Question 414:

  What is carried to the Exhibit of Net Investment Income, and used in calculating net investment income earned for the year?

  A. Revenues

  B. liabilities

  C. Expenses

  D. All of the above

  Correct Answer: C

• Question 415:

  What bypasses the overhead allocation questions and focuses on the relation of variable cost variances?

  A. Internal revenue code method

  B. Contribution margin method

  C. Direct costing method

  D. Ratemaking method

  Correct Answer: B

• Question 416:

  Which of the following is the source of variance that will help management (when understood in terms of the relationship among the many interacting components in a plan) are these?

  A. changes in resource prices not anticipated in the plan

  B. product mixes different than planned

  C. material differences for plan vs. actual resource productivity

  D. All of the above

  Correct Answer: D