Accounting for escrow funds is difficult because of the large number of transactions related to such funds. A separate bank account or a trust bank account may be opened, with all escrow receipts deposited...
Which counterparts of duration and convexity are the first- and second order sensitivities of an equity market instrument to changes in the price of the underlying?A . Delta and gammaB . Gamma and thetaC...
A holistic analysis in a multi-scenario framework of all significant factors that can affect an insurer’s future financial condition is called:A . Insurance resting (IT)B . Dynamic solvency testing (DST)C . Financial testing (AT)D...
Direct serving loans method requires a system of good internal control and requires that the functions be split between the Accounting Department and the Investment Department. The Investment Department is responsible for promptly supplying...
At the end of each reporting period, unearned premiums are calculated and the change in unearned premiums is recorded as a change or debit to premium income.A . TrueB . FalseView AnswerAnswer: B
A mismatch in the timing of asset maturities relative to policy benefits requiring either reinvestment or disinvestment by the insurer at uncertain future interest rates is known as:A . Reliable Mismatch RiskB . Maturity...
An entity method is applied to corporate joint ventures and to investments in certain less than majority-owned companies in circumstances where:A . the investment is for the long termB . the investor company has...
Financial statements of a self-sustaining foreign operation are translated using the current rate method whereby assets and liabilities are translated in the reporting currency using the exchange rate.A . TrueB . FalseView AnswerAnswer: A
A lower net retention level typically would translate into a higher vvariability of reserves.A . TrueB . FalseView AnswerAnswer: B
_______________ reserves for income tax purposes are referred to as maximum tax actuarial reserves (MTAR) and replace the actuarial liabilities used for accounting purposes in computing taxable income.A . Procedure-relatedB . Policy-relatedC . Standardized-...
