1
AIAF 114 2.0 QUESTIONS AND CORRECT ANSWERS
2024/2025 GRADED A+ BEST FOR REVISION.
An estimate of the amount of money the insurer expects to pay in the future for
losses that have already occurred and been reported, but are not yet settled. -
(answers)Loss reserve
The expense that an insurer incurs to investigate, defend, and settle claims
according to the terms specified in the insurance policy. - (answers)Loss
adjustment expense (LAE)
The expense an insurer incurs to investigate, defend, and settle claims that are
associated with a specific claim. - (answers)Allocated loss adjustment expense
(ALAE)
Loss adjustment expense that cannot be readily associated with a specific claim. -
(answers)Unallocated loss adjustment expense (ULAE)
Estimates of the future expense that an insurer expects to incur to investigate,
defend, and settle claims for losses that have already occurred. - (answers)Loss
adjustment expense reserves
Losses that have been paid to, or on behalf of, insureds during a given period. -
(answers)Paid losses
The losses that have occurred during a specific period, no matter when claims
resulting from the losses are paid. - (answers)Incurred losses
, 2
A reserve established for losses that reasonably can be assumed to have been
incurred but not yet reported. - (answers)Incurred but not reported (IBNR)
reserves
A method of organizing ratemaking statistics that uses incurred losses for an
accident year, which consist of all losses related to claims arising from accidents
that occur during the year, and that estimates earned premiums by formulas from
accounting records. - (answers)Accident-year method
The final paid amount for all losses in an accident year. - (answers)Ultimate loss
The increase or decrease of incurred losses over time. - (answers)Loss
development
A loss reserve assigned to an individual claim. - (answers)Case reserve
Reserves established for the settlement of an entire group of claims. -
(answers)Bulk reserves
A method to establish a case loss reserve based largely on experience with similar
claims. - (answers)Judgment method
A method to establish a case reserve by using an average amount for specific
categories of claims. - (answers)Average method
, 3
A case reserving method that establishes an average amount for all claims that
have similar characteristics in terms of the claimant's age, health, and marital
status. - (answers)Tabular method
A factor that is applied to the most recent estimate of incurred losses for a
specific accident year to estimate the ultimate incurred loss for that year. -
(answers)Ultimate loss development factor
The transfer of insurance risk from one insurer to another through a contractual
agreement under which one insurer (the reinsurer) agrees, in return for a
reinsurance premium, to indemnify another insurer (the primary insurer) for
some or all of the financial consequences of certain loss exposures covered by the
primary's insurance policies. - (answers)Reinsurance
In reinsurance, the insurer that transfers or cedes all or part of the insurance risk
it has assumed to another insurer in a contractual arrangement. -
(answers)Primary insurer
The insurer that assumes some or all of the potential costs of insured loss
exposures of the primary insurer in a reinsurance contractual agreement. -
(answers)Reinsurer
Contract between the primary insurer and reinsurer that stipulates the form of
reinsurance and the type of accounts to be reinsured. - (answers)Reinsurance
agreement
AIAF 114 2.0 QUESTIONS AND CORRECT ANSWERS
2024/2025 GRADED A+ BEST FOR REVISION.
An estimate of the amount of money the insurer expects to pay in the future for
losses that have already occurred and been reported, but are not yet settled. -
(answers)Loss reserve
The expense that an insurer incurs to investigate, defend, and settle claims
according to the terms specified in the insurance policy. - (answers)Loss
adjustment expense (LAE)
The expense an insurer incurs to investigate, defend, and settle claims that are
associated with a specific claim. - (answers)Allocated loss adjustment expense
(ALAE)
Loss adjustment expense that cannot be readily associated with a specific claim. -
(answers)Unallocated loss adjustment expense (ULAE)
Estimates of the future expense that an insurer expects to incur to investigate,
defend, and settle claims for losses that have already occurred. - (answers)Loss
adjustment expense reserves
Losses that have been paid to, or on behalf of, insureds during a given period. -
(answers)Paid losses
The losses that have occurred during a specific period, no matter when claims
resulting from the losses are paid. - (answers)Incurred losses
, 2
A reserve established for losses that reasonably can be assumed to have been
incurred but not yet reported. - (answers)Incurred but not reported (IBNR)
reserves
A method of organizing ratemaking statistics that uses incurred losses for an
accident year, which consist of all losses related to claims arising from accidents
that occur during the year, and that estimates earned premiums by formulas from
accounting records. - (answers)Accident-year method
The final paid amount for all losses in an accident year. - (answers)Ultimate loss
The increase or decrease of incurred losses over time. - (answers)Loss
development
A loss reserve assigned to an individual claim. - (answers)Case reserve
Reserves established for the settlement of an entire group of claims. -
(answers)Bulk reserves
A method to establish a case loss reserve based largely on experience with similar
claims. - (answers)Judgment method
A method to establish a case reserve by using an average amount for specific
categories of claims. - (answers)Average method
, 3
A case reserving method that establishes an average amount for all claims that
have similar characteristics in terms of the claimant's age, health, and marital
status. - (answers)Tabular method
A factor that is applied to the most recent estimate of incurred losses for a
specific accident year to estimate the ultimate incurred loss for that year. -
(answers)Ultimate loss development factor
The transfer of insurance risk from one insurer to another through a contractual
agreement under which one insurer (the reinsurer) agrees, in return for a
reinsurance premium, to indemnify another insurer (the primary insurer) for
some or all of the financial consequences of certain loss exposures covered by the
primary's insurance policies. - (answers)Reinsurance
In reinsurance, the insurer that transfers or cedes all or part of the insurance risk
it has assumed to another insurer in a contractual arrangement. -
(answers)Primary insurer
The insurer that assumes some or all of the potential costs of insured loss
exposures of the primary insurer in a reinsurance contractual agreement. -
(answers)Reinsurer
Contract between the primary insurer and reinsurer that stipulates the form of
reinsurance and the type of accounts to be reinsured. - (answers)Reinsurance
agreement
