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AFE Practice Exam Questions and Answers

Accredited Financial Examiner

Last Update 14 hours ago
Total Questions : 286

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Question # 1

For reinsurance assumed, the concepts analogous to attachment points and limits are referred to as

Options:

A.  

Severity Levels

B.  

Frequency Levels

C.  

Policy levels

D.  

Retention levels

Discussion 0
Question # 2

The reason behind, when an insurance entity may request permission from the domiciliary state regulatory authority to use a specific accounting practice in the preparation of its statutory financial statements, may include:

Options:

A.  

the entity wishes to depart from Statutory Accounting Practices (SAP)

B.  

the prescribes SAP address the accounting for transaction

C.  

Both A & B

D.  

Neither A nor B

Discussion 0
Question # 3

The SEC rules clarify that management’s assessment and report is limited to internal control over financial reporting.

Options:

A.  

True

B.  

False

Discussion 0
Question # 4

The securities repurchased have the same stated interest rate as, and maturities similar to, the securities sold and are generally priced to result in substantially the same yield is known as:

Options:

A.  

Yield-maintenance agreements

B.  

Variable-coupon agreements

C.  

Fixed-coupon agreement

D.  

None of the above

Discussion 0
Question # 5

Spreading of risks among insurance entities is called:

Options:

A.  

Reinsurance

B.  

Syndication

C.  

Consortium act

D.  

Risk Diffusion

Discussion 0
Question # 6

Insurance entities establish

claims of the member companies.

Options:

A.  

Company competency

B.  

Claim opportunities

C.  

Corrective strategies

D.  

Adjustment bureaus

Discussion 0
Question # 7

_______ is contractual right of recovery that entitles the insurer to any proceeds from the disposal of damaged property for which the claim has been made.

Options:

A.  

Claim adjustment

B.  

Claim recovery

C.  

Subrogation

D.  

Salvage

Discussion 0
Question # 8

Admitted assets are those specifically prescribed by the NAIC Accounting Practices and Procedures Manual or prescribed or permitted by the various jurisdictions. An admitted asset is defined as having probable future economic benefits. It also has three essential characteristics. Which one of the following is out of those characteristics?

Options:

A.  

It embodies a probable future benefit which contributes to cash flow

B.  

A particular entity can obtain this benefit

C.  

The transaction giving rise to entity’s right to control the benefit has already occurred

D.  

All of these

Discussion 0
Question # 9

Revenue risk is defined as:

Options:

A.  

the general administrative costs of insurers include components that do not necessarily vary with the level of the equity markets

B.  

the general administrative costs of investors include components that must necessarily vary with the level of the equity markets

C.  

the particular administrative costs of insurers include components that must necessarily vary with the level of the equity markets

D.  

the general administrative costs of investors include components that do not vary with the level of the equity markets

Discussion 0
Question # 10

What usually features a fixed premium that acts to levelize the policyholder’s outlay over the lifetime of the policy?

Options:

A.  

Whole life insurance

B.  

Permanent life insurance

C.  

Fiscally examined insurance

D.  

Life time insurance

Discussion 0
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