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Free SOFE AFE Practice Exam with Questions & Answers | Set: 7

Questions 61

A mortgage servicer performs all of the servicing functions. The servicer remits all funds received on the serviced loans to the company on a monthly or other periodic basis and usually reports all transactions, including foreclosures and transactions related to foreclosed property. The contract between the company and servicer should provide that the:

Options:
A.

Company can periodically audit the servicer’s records and files pertaining to the loans owned by the company. In lieu of making the audit, the company can agree to receive an annual audit report pertaining to its loans from the servicer’s independent certified public accountants. This is the single audit concept

B.

Servicer should not have a fidelity bond and an errors and omission policy of stipulated minimum amounts

C.

Servicer must have a fidelity bond and an errors and omission policy of stipulated minimum amounts

D.

Servicer must have an annual independent audit, with a copy of the audited financial statements sent to the company within a certain period of time after the end of the servicer’s fiscal year

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Questions 62

Claims adjusting involve:

Options:
A.

a field work

B.

an appraisal of risk subject to appropriate supervision

C.

approval by entity’s claims department

D.

All of the above

Questions 63

The Annual Statement reporting requirements for the participating and nonparticipating branches is limited to major and secondary lines of business, but a company would:

Options:
A.

Usually carry this separation throughout all of its premium classifications

B.

Do not carry this separation throughout all of its premium classifications

Questions 64

Selling a stream of contingent revenues to another party, at a discount to the expected value is called:

Options:
A.

Prioritized investment

B.

Reinsurance

C.

Profit

D.

Securitization.

Questions 65

Which investments held by life insurance enterprises should be carried in the balance sheet at amortized cost?

Options:
A.

Appraisal-term acts

B.

Variable-term portfolio

C.

Fixed-term portfolio

D.

Revenue-earned portfolio

Questions 66

What features a reserve that accumulates at company declared credited interest rates, which are periodically reset?

Options:
A.

Credited life insurance

B.

Periodic life insurance

C.

Premium life insurance

D.

Universal life insurance

Questions 67

Revenue risk is defined as:

Options:
A.

the general administrative costs of insurers include components that do not necessarily vary with the level of the equity markets

B.

the general administrative costs of investors include components that must necessarily vary with the level of the equity markets

C.

the particular administrative costs of insurers include components that must necessarily vary with the level of the equity markets

D.

the general administrative costs of investors include components that do not vary with the level of the equity markets

Questions 68

What are designed primarily to accumulate a fund for eventual liquidation via annuitization, so the savings element is predominant?

Options:
A.

Variable annuities

B.

Deferred annuities

C.

Immediate annuities

D.

None of the above

Questions 69

Uncollected premiums

Options:
A.

Are also an asset in statutory accounting

B.

Are usually those past the due date but in the grace period

C.

Accounting is similar to that for deferred premiums in that only the net premiums are necessary to match the reserve liability

D.

Only A and B

Questions 70

The arrangements by which pools manage separate accounts for each pool member from which the losses of that member are paid is called:

Options:
A.

employee pools

B.

claim-serving pools

C.

singular entity pools

D.

None of the above

Exam Code: AFE
Certification Provider: SOFE
Exam Name: Accredited Financial Examiner
Last Update: Jun 24, 2025
Questions: 286
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