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With which standard, the auditor’s substantive procedures must include reconciling the financial statements to the accounting records and should include examining material adjustments made during the course of preparing the financial statements.
A change in _______ or its application is appropriate if the change results in a measurement that is equally or more representative of fair value in the circumstances.
Valuation technique should be used to measure fair value and is consistent with:
In which policies the contract provides for insurance coverage for a fixed period of duration and enables the insurer to not renew the contract or adjust the provisions of the contract at the end of the contract period?
An instrument that grants the holder the right but not the obligation to buy the underlying asset at a specified strike price is known as:
An entity’s practices concerning loss settlement, such as a practice of vigorously defending suits or of quickly settling suits, can have a significant effect on an entity’s loss experience.
To realize the effect on the “bottom line,” or the net gain from operations, from various transactions, one must consider the amount of any liabilities that are released because of the transaction. Assume a death claim entry as follows:
Death proceeds-ordinary $10,000
Dividends on deposit disbursed 1,000
Cash $11,000
On first appearance, one might think that this will cause the net gain from operations to be $11,000 lower. However, if the policy has a reserve of $3,000, the effect on the net gain is only , because the reserve liability of $3,000 and the dividend liability of $1,000 will no longer be shown on the balance sheet
What of a life insurer’s is determined by applying factors for risk components to specific on and off-balance sheet assets or liabilities and by adding the results?
The nature and extent of interest rate risk, credit risk, reinsurance risk and other significant risks should be disclosed is required for:
Which of the following is NOT the Asset/ Liability Management (ALM) activity?
What encompasses investment income and gains and losses, as well as custody of investment and recordkeeping?
What usually features a fixed premium that acts to levelize the policyholder’s outlay over the lifetime of the policy?
The Annual Statement reporting requirements for the participating and nonparticipating branches is limited to major and secondary lines of business, but a company would:
Generally, residential loans are open to prepayment at any time without penalty. To protect against a deficiency, mortgage loans should not exceed the market value of the mortgaged property and in fact are usually made for:
The highest and best use of the asset is ______________, if the asset would provide maximum value to market participants principally on the standalone basis.
Fair quoted techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs.
Which projection method uses paid losses plus reserves on outstanding claims?
The agents submit to the insurance entity a statement of all policies issued or due during the current month, and the net amount of the statement is subsequently to be paid in accordance with the agency agreement, is an account current of:
Insurers issuing participating policies sometimes incur dividends which have been earned but which have not been disbursed or otherwise credited as of the financial statement date. Such dividends represent a due and unpaid liability amount. Reasons why dividends may be due and unpaid include all of the following EXCEPT:
SAP stresses measurement of emerging earnings of a business from period to period while GAAP stresses measurement of the ability to pay claims in the future.
The date on which the contract becomes effective is known as _.
Scope of Examination and Report of Independent Certified Public Accountant states that:
These are the loans in which:
Arrangement is usually called commitment When the structure is completed and put in service, the loan is paid off from the proceeds of the long term financing, whatever its source Proper controls would require the lender to obtain documentation for the disbursed portion of the construction loan and be assured that the cost of the structure to date is equivalent to the disbursed portion of the construction loan. What are these?
Extrapolation of historical dollars, projection of separate frequency data, use of expected loss ratios are all projection methods for:
A holistic analysis in a multi-scenario framework of all significant factors that can affect an insurer’s future financial condition is called:
Which of the following id NOT the kind of Insurance?
Fidelity bonds cover employees against dishonest acts by employees.
Savvy sales agents, acting in the interests of their clients, instigate surrenders of the original policies and placement with the new insurers, this phenomenon is known as:
Many companies have developed an asset/liability management approach that is founded on understanding product liabilities. Mortgages meet the primary objective of maintaining:
Which risk assessment procedures are used to obtain an understanding of the entity and its environment, including its internal control?
The private pools can fall in which two categories:
Traditional insurance risks are generally are random and average out over larger populations.
The purest representation of asset/liability dynamics is instead through ____________, which measure assets and liabilities according to the cash flows they generate.
Who is responsible for accounting for customer remittance advices and the agent’s current account?
The method used to account for insurance and reinsurance contracts that do not transfer insurance risk is referred to as:
What represent legal agreements between buyers or sellers and represent commitments to buy or sell financial instruments at specified dates and prices?
To meet informational demands, internal management reporting will entail alternate views of the organization’s financial performance. These areas, or views, are including all of the following EXCEPT:
The amount that currently would be required to replace the service capacity of an asset is called:
National Association of Insurance Commissioners stated that, has no effect on the valuation of securities for statutory accounting purposes, provided the amount of the collateral at least equals the required collateral.
If claims have been reported to the insurer after the contract period, it may several months for the insurer to investigate and establish a case reserve for reported claims.
All operations under common control are combined, intercompany balances and transactions are eliminated and the effects of minority interests are recorded through:
Lines of insurance in which claims are settled relatively quickly are called: