AIAF 114 - Chapter 4 Practice Exam Questions With Correct Answers!!
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Course
AIAF 114
Institution
AIAF 114
Some premium payment plans may include additional payments that exceed the amount required if
the premium was paid in full at the policy inception. Such additional payments that are a function of
the amount of premium payment are treated under U.S. regulatory accounting as - Answer-Finance
charg...
AIAF 114 - Chapter 4 Practice Exam Questions Some premium payment plans may include additional payments that exceed the amount required if the premium was paid in full at the policy inception. Such additional payments that are a function of the amount of premium payment are treated under U.S. regulat ory accounting as - Answer -Finance charges. Under U.S. regulatory accounting, the liability for extended reporting endorsements covering a definite period into the future is recorded as - Answer -Unearned premium reserves Retrospective premium adjustments - Answer -Can continue for many years after the original policy term has expired. Deficiency in the loss reserves - Answer -Does not necessarily indicate a deficiency in the unearned premium reserve The asset -liability approach may be used as a new accounting standard for insurance contracts, rather than the deferral -matching approach. Under the asset -liability approach, revenue is recognized - Answer -When the insurer gains control of the asset resulti ng from the revenue Which one of the following might be a reason for a regulatory accounting system to gross up the reported premiums by the amount of credits for large deductible arrangements? - Answer -To avoid a negative impact on smaller insureds under a premium assessment system Under a deferral -matching approach, the portion of written premium that relates to future coverage periods is considered - Answer -An unearned premium liability. Which one of the following best describes loss reserves? - Answer -The estimate of the ultimate cost of incurred but unpaid losses Which one of the following statements is true regarding loss reserves and the unearned premium reserve? - Answer -Loss reserves and the unearned premium reserve cover different portions of claim obligations with no overlap.
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