AFE Exam Questions and Answers | Exam-Dumps (Page: 5)

QUESTION: 33

Cash does include funds in transit, unless the deposit was prepared and sent to the bank. If the deposit was sent to the bank, it is considered cash and entered into the company's books and is no longer in transit. Funds in transit not yet sent to the bank are entered:

On a write-in line on the Assets page
As a prepaid asset on the Assets page
As a long-term asset on the Assets page
As a non-admitted asset on Asset page

Answer(s): A

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QUESTION: 34

In the NAIC Accounting Practices and Procedures Manual there is limitation on the amount of EDP equipment and operating systems software, that can be shown as admitted assets. Companies are generally limited to _______________ of the reporting entity's capital and surplus, as reported in the financial statement most recently filed with the domiciliary commissioner adjusted to exclude any EDP and operating system software, net deferred tax assets and positive goodwill.

Four percent
Three percent
Five percent
Seven percent

Answer(s): D

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QUESTION: 35

Uncollected premiums

Are also an asset in statutory accounting
Are usually those past the due date but in the grace period
Accounting is similar to that for deferred premiums in that only the net premiums are necessary to match the reserve liability
Only A and B

Answer(s): A,B,C

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QUESTION: 36

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 ___________ from the settlement date are non-admitted, and are classified as other than invested assets.

15 days
30 days
35 days
90 days

Answer(s): A

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QUESTION: 37

Insurers issuing participating policies sometimes incur dividends which have been earned but which have not been disbursed or otherwise credited as of the financial statement date. Such dividends represent a due and unpaid liability amount. Reasons why dividends may be due and unpaid include all of the following EXCEPT:

Premium payment transactions not recorded within the last processing cycle for the reporting period.
All premiums paid to the anniversary date
The policy anniversary date is near the end of the calendar year and the policyholder has elected to receive dividends in cash, but the cash dividend has not yet been disbursed
The policy anniversary date is near the end of the calendar year and the policyholder has elected to have the dividend reduce the premiums, but the premium for the next policy year has not yet been received

Answer(s): B

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QUESTION: 38

When dividends are left to accumulate at interest, the insurer typically sends a notice to each policyholder showing the amount accumulated at the end of the policy year. The notice also shows the dividend credited and interest earned for that policy year. The dividend left at interest may later be received by or credited to the policyholder in several ways. Which of the following is/are out of those ways?

As a cash withdrawal.
As premium applied to the purchase by the policyholder of paid-up insurance.
As marketable securities
As premium to pay up or mature the policy.

Answer(s): A,B,D

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QUESTION: 39

Experience refund provisions of group insurance contracts are most often concerned with the manner of distributing any profits between the insurer and the insured group. The agreements usually contain provisions specifying how losses will affect the profit allocations for the insured group. In such situation:

Losses may or may not be charged back
Losses can never be charged back
Gains are distributed according to the agreement between both the parties
If charged back, losses for each group are usually accumulated for a certain number of years

Answer(s): A,D

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QUESTION: 40

Supplementary contracts may be issued by an insurer upon the termination of a life insurance contract that has been terminated by death, maturity, or surrender. The policyholder, if living or the beneficiary elects the option under which the proceeds are paid. The payment options usually available are:

To receive a guaranteed fixed number of payments
To receive payments of a certain amount until the proceeds are exhausted.
To leave the proceeds with the insurer to earn interest with payment to be made at a later date.
Any one out of these

Answer(s): D

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Financial AFE Exam (page: 5) Financial Accredited Examiner (AFE) Updated on: 25-Dec-2025

QUESTION: 33

QUESTION: 34

QUESTION: 35

QUESTION: 36

QUESTION: 37

QUESTION: 38

QUESTION: 39

QUESTION: 40

Financial AFE Exam (page: 5)
Financial Accredited Examiner (AFE)
Updated on: 25-Dec-2025