LOMA 361 ANSWERS AND QUESTIONS SET A.pdf

LOMA 361 ANSWERS AND QUESTIONS SET A+
✔✔Expense vs. Liability accounts - ✔✔"Incurred" or "Paid" = expense
"Due" or "Accrued" = liability

✔✔External sources of funds - ✔✔Issuing surplus notes
Ceding insurance risk to a reinsurer
Selling in-force business or a subsidiary
Issuing stock
Changing corporate form

✔✔Income as asset accounts - ✔✔Uncollected
Accrued
Deferred

(Collected = Revenue or Liability)
(Unearned = Liability)

✔✔Liquidity Ratio - ✔✔Quick Liquidity Ratio =
Liquid Assets / Contractual Reserves

✔✔Activity Ratio - ✔✔Total Asset Turnover = Total Revenues / Total Assets

✔✔Leverage Ratios (3) - ✔✔Debt-to-Surplus Ratio = Total Liab / Total Surplus

Insurance Leverage Ratio =
Contractual Reserves / Capital & Surplus

Surplus Relief Ratio =
Net cost/income from reinsurance / Capital & Surplus

✔✔Capital & Surplus Ratios (3) - ✔✔Capital & Surplus Ratio =
Capital & Surplus / Total Liabilities

Capital ratio = Capital / Total Liabilities