With the advent of adjustable rate mortgages, amortization schedules are adjusted periodically as dictated by the terms of the loan agreement. A _____________file is used to indicate when to adjust the rate. Most computer software systems can adjust amortization schedules by reminding the company of change dates, accept current rate adjustments, and to produce new schedules.
What allows an entity to eliminate the reserve that was recorded for the claim, even if it exceeded the amount paid for the settlement?
The adjustments of the premium during the period of coverage based on actual experience during that same period are called:
The process of analyzing and projecting the trends of a company’s capital position given its current circumstances, its recent past, and its intended business plan under a variety of future scenarios is called:
An annuity contract provides:
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.
What features a reserve that accumulates at company declared credited interest rates, which are periodically reset?
The estimated amount receivable from third parties from whom the insured may have the right to recover damages is known as:
Coverage of risks that do not fit normal underwriting patterns and that are not commensurate with standard rates is normally refers to as:
The ten largest companies account for what percent of life insurance sales in Canada?
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:
Interest rates are a key element of any option pricing exercise because cash flows are discounted at interest.
What funnels premium dollars into separate accounts which means segregated pools of bonds or stocks?
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.
When no tax deductions are allowed if risks are not transferred, whereas premiums paid to insurers are tax deducible, this leads to the formation of:
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?
The method which assumes that an entity’s experience in estimating case-basis reserves will be repeated in the future is called:
During the underwriting process, information related to a mortgage loan is collected, and this information is the basis for a final decision as to whether or not the loan should be made. The documents generated during this underwriting process are all of the following EXCEPT:
What is applied to the sale of all or a block of an entity’s insurance in force of another entity?
The operating ratio is the combined ratio less than the ratio of investment income, to earned premiums.
What is characterized by liabilities “shorter” than assets, which can lead to the liquidation of assets at depressed values in times of higher than expected interest rates?
Which of the following may NOT involve a high degree of management judgment and subjectivity and may present risks of material misstatement due to fraud?
Which of the following is Correct?
The options for securities that insurance entities own and can deliver if the options are exercised by the option buyers are called:
These are securities whose underlying assets consist of commercial mortgage loans. The commercial loans are pooled, which brings diversification and liquidity to the asset class.
What are these?
There are many different sources of CMBS. Conduits and aggregate pools generally consist of loans newly originated, purchased or held by investment bankers until the pool is large enough for an efficient execution. Government agencies such as the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corp. (FHLMC) are important sources of:
Which investments held by life insurance enterprises should be carried in the balance sheet at amortized cost?
Which control includes the procedures for system design, including the acquisition of software packages, should encourage active participation by the accounting department and internal auditors?
What technique uses a risk-adjusted discount rate and contractual, promised, or most likely cash flows?
Fidelity bonds cover employees against dishonest acts by employees.
Audit regulatory is more reliable when it is obtained from knowledgeable independent sources inside the entity.
All operations under common control are combined, intercompany balances and transactions are eliminated and the effects of minority interests are recorded through:
is the price in a hypothetical transaction at the measurement date in the market in which the reporting entity would transact for the asset or liability
Which of the following id NOT the kind of Insurance?
Sales of securities are recorded as of the trade date. A receivable due from the broker is established in instances when a security has been sold, but the proceeds from the sale have not been received. Receivable for securities not received within settlement date are non-admitted, and are classified as other than invested assets.
With fixed deferred annuities;
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:
Traditional insurance risks are generally are random and average out over larger populations.
Which of the following is NOT of equity market sensitivities that are usually considered in dynamic hedging?
Identification and documentation of the controls and policies which address the risk management issues for each of the Standards is the necessary step for: