SOFE Exam AFE Topic 3 Question 100 Discussion

Actual exam question for SOFE's AFE exam

Question #: 100
Topic #: 3

[All AFE Questions]

Reinsurance is defines as:

Ato pay another party to assume a stream of contingent expenses, for a premium over the expected cost

Bto pay another party to assume a stream of contingent revenues, for an interest over the expected cost

Cto sell another party to assume a stream of contingent assets, for a premium over the actual cost

Dto sell another party to assume a stream of contingent expenses, for a discount over the expected cost

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Suggested Answer: A

by Jesusita at Jun 16, 2025, 10:21 AM

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8 days ago

I think the answer is A, because reinsurance is about transferring risk to another party for a premium.

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