SOFE Exam AFE Topic 1 Question 91 Discussion

Actual exam question for SOFE's AFE exam

Question #: 91
Topic #: 1

[All AFE Questions]

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:

AA separation of accounting, so that profits applicable to participating and nonparticipating business can be appropriately determined

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

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

DAny of these

Show Suggested Answer

Suggested Answer: D

by Teddy at Nov 19, 2024, 01:56 AM

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Willard

20 hours ago

Definitely option B. It's crucial to have a clear separation of accounts to properly allocate profits from participating business. Can't have the company pocketing all the profits, you know?

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Matilda

11 days ago

The purpose of these special accounting procedures is to ensure transparency and fairness in the distribution of profits between participating policyholders and the company's stockholders. Seems like a reasonable approach to me.

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