legal right of the insurer to recover from a third party who may be wholly or partly responsible for the loss paid under the terms of the policy.

legal right of the distributer to recover from vendors who may be wholly responsible for the loss paid under the terms of the agreement.

legal right of the insurer to recover from a third party who may be wholly or partly responsible for the loss paid under the terms of the policy.

legal right of the claimer to recover from the organization that may be wholly or partly responsible for the loss paid under the terms of the company's policy.

legal right of the business to recover from a third party who may be wholly responsible for the loss paid under the terms of the policy.

For purposes of establishing an appropriate financial statement reserve, the most important factors to consider are:

consistency in the reserving approach

availability of statistical analysis of reserves

Reduction for salvage is:

the estimated amount receivable by the insurer from the disposition of damaged or recovered property

the estimated amount payable by the vendor from the disposition of damaged or recovered property

the actual amount receivable by the claimer from the temperament of damaged property

the actual amount payable by the investor from the disposition of damaged or recovered property

the estimated amount receivable by the insurer from the disposition of damaged or recovered property

Which of the following is NOT the way to make changes in variables that can be considered in the loss reserving process?

adjustment of historical loss data

separate calculation of effect of variables

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.

Public Company Accounting Oversight Board

Integrated Audit Financial Statement

Public Company Accounting Oversight Board

Audit of Financial Reporting over Internal Control

National Association of Insurance Commission

A stock life insurance company writing both participating and nonparticipating business must follow special accounting procedures under the laws of certain jurisdictions. The purpose of these special accounting procedures is to provide for:

A separation of accounting, so that profits applicableto participating and nonparticipating business can be appropriately determined

This is a critical process, since profits from participating business are regulated as to their distribution among participating policyholders and the company's stockholders

Some jurisdictions require the filing of several of the statutory statement exhibits in three forms, one for the company as a whole

Procedures for ensuring that the data used by the loss reserve specialist is completed and accurate due to:

Controls over the preparation of supporting data

Controls over the preparation of managerial data

Controls over the preparation of accounting estimates

Controls over the preparation of supporting data

Controls over the preparation of assumed alternatives

In which of the following, Internal entity experience or information from published sources concerning recent trends in socioeconomic factors affecting claim payments:

judicial decisions assessing liability

judicial decisions regarding noneconomic damages

The method which assumes that an entity's experience in estimating case-basis reserves will be repeated in the future is called:

Reported loss development projection

Internal entity loss projection

Which of the following is Correct?

the financial position of an entity with a 2-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

the financial position of an entity with a 2-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

the financial position of an entity with a 4-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

the financial position of an entity with a 4-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

The estimated liability includes the amount of money that will be used for future payments of:

Claims related to insured events

Insurance entities usually write covered-call options because they consider the premium received for writing the options to be either:

an economic hedge between a decline in market price and security

a decrease in yield on the underlying risk security

ABA CTFA Practice Test 21 - Free Online Exam Prep & Questions

___________ 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.

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ABA CTFA Practice Test 21

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