Free CAS Exam 6-U.S. (Regulation and Financial Reporting) Annual Statement Schedules & the IEE Practice Questions
Practice 62 free Annual Statement Schedules & the IEE questions for CAS Exam 6-U.S. (Regulation and Financial Reporting).
Sample Questions
Question 1
Easy
The Insurance Expense Exhibit (IEE) is filed to accomplish which of the following?
Solution
A is correct. The IEE allocates underwriting expenses, losses, and investment gain to each line of business so that a profit or loss by line can be measured. It is the schedule regulators use to assess whether individual lines are contributing to or draining surplus, and it supports rate-adequacy and profitability review.
Question 2
Medium
The Underwriting and Investment Exhibit reports paid losses of $300 million for the year. Loss reserves were $500 million at the beginning of the year and $560 million at the end. What are the insurer's incurred losses for the year?
Solution
A is correct. Incurred losses equal paid losses plus the change in loss reserves during the year: million.
Question 3
Hard
Compute the total Schedule F provision for reinsurance from the following. Authorized Reinsurer A has recoverables of $10,000,000 with $1,500,000 more than 90 days overdue; A does not meet the slow-paying threshold. Unauthorized Reinsurer B has recoverables of $4,000,000, collateral of $3,200,000, and $500,000 overdue.
Solution
D is correct. Authorized Reinsurer A is not slow-paying, so it draws 20% of its overdue balance: 0.20 × $1,500,000 = $300,000. Unauthorized Reinsurer B’s provision adds two components: the collateral deficiency, $4,000,000 − $3,200,000 = $800,000, plus 20% of its overdue balance, 0.20 × $500,000 = $100,000, for $900,000 in total. The total provision = $300,000 + $900,000 = $1,200,000, recorded as a liability that reduces policyholder surplus.