Estimating the premiums needed to fund future promises is called:

A. Prospective funding

B. imminent procedure

C. ratemaking

D. potential funding

For a given financial statement, what should represent an insurer's best estimate of the liability?

A. reasonable reserve

B. carried reserve

C. indicated reserve

D. formula reserve

The projection method is not totally accurate in developing the unearned premium reserve, it provides the best estimate based on prior experience and adjusted for current activities.

A. True

B. False

The formula to calculate Losses incurred for the accounting period is:

A. Incurred losses = (Losses paid to date) / (Loss reserve prior period) + (loss reserve final period)

B. Incurred losses = (Losses paid to date) _ (Loss reserve prior period) + (loss reserve current period)

C. Incurred losses = (Annual Losses) _ (Losses paid to date) + (loss reserve current period)

D. Incurred losses = (Losses paid to date) + (Loss reserve prior period) _ (loss reserve current period)

The purpose of the ______________ is to provide equitable settlements with claimants as well as to control the insurer's claim costs from economic and social inflation.

A. Annuity method

B. Casualty control method

C. periodic payment method

D. Loss reserves

Which policy covers losses reported during the policy period rather than when they occurred?

A. case reserve

B. case average

C. claims-made

D. reported claim

The accrual or reserve for anticipated salvage and subrogation receipts would be recorded in which account?

A. draft register reserve

B. debt-first reserve

C. contra-liability loss reserve

D. unstructured reserve

The instrument that involves a contract between two parties to exchange interest payments on a specified principal amount (referred to as the notional principal) for a specific period is called:

A. transfer rate

B. interest rate swap

C. interest relocation

D. passing on interest rate

What must be calculated by using a prescribed method that usually results in amounts different from the Annual Statement?

A. credits

B. obligations

C. reserves

D. taxation

Which of the following is the condition, which must be met, for a contract to indemnify the ceding company against loss or liability relating to insurance risk?

A. The reinsurer has assumed significant risk

B. It is reasonably possible that the reinsurer may realize a significant loss

C. Both A and B

D. Neither A nor B