SOFE Exam SOFA-CFE Topic 3 Question 69 Discussion

Actual exam question for SOFE's SOFA-CFE exam

Question #: 69
Topic #: 3

Which insurance arrangement, which involved insurance of a loss that had previously occurred, similarly was found not to be insurance for federal income tax purposes?

Aannual statement

Bretroactive

Creserved

DTax reserves

Show Suggested Answer

Suggested Answer: D

by Mariann at Apr 19, 2023, 08:24 AM

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Adelina

2 months ago

Tax reserves? Now that's a new one. Is the IRS just making up insurance terms now? I'm sticking with B) retroactive, it's the only one that makes any sense.

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Naomi

16 days ago

Yeah, tax reserves are important for insurance companies to ensure they can cover future claims. Retroactive insurance does make the most sense in this context.

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Helaine

24 days ago

Yeah, I agree. Tax reserves and retroactive both seem like valid options in this case.

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Viola

1 months ago

I think retroactive makes sense too, it's like covering a loss that already happened.

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Ryan

1 months ago

I think you're right, retroactive insurance is when coverage is provided for a loss that has already occurred.

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Phillip

1 months ago

Tax reserves are actually a common term in insurance, it's used to cover future claims.

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Edna

1 months ago

Tax reserves are actually a common term in insurance, it's used to set aside funds for potential future claims.

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Velda

2 months ago

Annual statement, really? That's just basic accounting, not insurance. Gotta be B) retroactive, even if it sounds a bit sketchy.

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Brandee

12 days ago

I'm going with retroactive too, it just fits the description better.

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Samira

17 days ago

It does sound a bit sketchy, but I think retroactive makes the most sense.

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Art

23 days ago

Yeah, retroactive seems like the best option here.

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Rolf

29 days ago

I agree, annual statement doesn't sound like insurance at all.

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Cletus

1 months ago

Exactly, as long as it meets the criteria, it's considered insurance.

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Kanisha

1 months ago

True, it's all about how the arrangement is structured.

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Han

1 months ago

But it's still considered insurance for federal income tax purposes.

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Chauncey

1 months ago

I agree, retroactive insurance does sound a bit sketchy.

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Matthew

2 months ago

Hmm, this one's tricky. I'm gonna go with B) retroactive, seems like the only option that fits the description. Though I gotta say, the IRS must have a sense of humor to call that 'insurance'.

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