CEBS - GBA 1 - Actual Questions &
Answers 100% Guarantee Pass
Q1. A group contract generally defines offsets used to reduce the benefit
payable under a long-term disability (LTD) plan. Which statement correctly
describes direct offsets?
A) They include dependent life insurance proceeds and dental benefits
B) They include primary benefits payable under C/QPP disability pensions and
Workers' Compensation (WC) benefits
C) They include employer-paid pension contributions only
D) They include health care spending account credits
Answer: B
Q2. A single-employer plan sponsor may want to cover which of the following
categories of individuals under its group benefits plan?
A) Only active permanent employees
B) Only unionized employees and their dependents
C) Active permanent employees and dependents, surviving dependents of
deceased employees, and employees temporarily separated due to layoffs,
leave, military duty, or strikes
D) Only retirees and their spouses
Answer: C
Q3. A type of service offered under a third-party administrator's (TPA) claims
settlement only arrangement is:
A) Negotiating premium rates with insurers
B) Adjudicating and paying claims
C) Marketing the plan to prospective members
D) Setting reserve requirements
Answer: B
Q4. According to CLHIA guidelines on insurance product disclosure, the plan
description provided to each individual insured under a group contract
includes:
A) The insurer's internal profit margins
B) Other members' medical history
C) The name of the plan sponsor, insurer, and group policy number, plus
claims provisions (how to submit a claim and proof-of-loss time limits)
D) The commission structure paid to the broker
Answer: C
,Q5. Aiesha invested $1,000 at 6% simple interest annually. Reggie invested
$1,000 at 6% compounded semiannually. How much will they accumulate in
total after two years?
A) $2,120
B) $2,200
C) $2,246
D) $2,300
Answer: C ($1,120 + $1,126 = $2,246)
Q6. All the following claims charges are included in an experience analysis for
LTD benefits, EXCEPT:
A) Incurred claims
B) Claims reserves
C) A cost trend factor
D) Earned premium
Answer: C (Cost trend factors are used for health care/dental, not LTD)
Q7. All the following statements correctly describe a morbidity rate, EXCEPT:
A) It measures the incidence of sickness/accidents in a population
B) It does not vary by sex and age
C) It is used to price disability and health benefits
D) Fewer credible data sources exist for morbidity than mortality
Answer: B (Morbidity rate does in fact vary by sex and age)
Q8. All the following statements correctly describe an individual association
benefits plan, EXCEPT:
A) Coverage is available to members of a professional or trade association
B) There are employer contributions to individual association benefits plans
C) Premiums are generally paid by the individual member
D) It is a way for self-employed individuals to access group-type coverage
Answer: B (There are no employer contributions)
Q9. All the following statements correctly describe CDAnet, EXCEPT:
A) It allows electronic submission of dental claims
B) It reduces the need for paper claim forms
C) Predeterminations requiring X-rays or study models can be sent via
CDAnet
D) It connects dental offices directly to insurers/payors
Answer: C (Such predeterminations cannot be sent via CDAnet)
Q10. All the following statements correctly describe deductibles used in group
benefit plans, EXCEPT:
A) A deductible is a fixed dollar amount paid by the plan member before
benefits are paid
B) Coinsurance has inflation and utilization changes built into it
,C) Deductibles help control claims costs
D) Deductibles may apply per claim or per benefit year
Answer: B (This describes deductibles, not coinsurance — coinsurance does
NOT have this built in)
Q11. All the following statements correctly describe examples of a physical
hazard, EXCEPT:
A) Poor building wiring increasing fire risk
B) Grayson smokes about 5 cigarettes a day and plans to quit, but indicated
he's a nonsmoker on his renewal
C) An icy walkway with no salt applied
D) A poorly maintained furnace
Answer: B (This is an example of a moral hazard, not physical)
Q12. All the following statements correctly describe performance standards
agreements (PSAs) in group benefits plan administration, EXCEPT:
A) PSAs set measurable service targets
B) They are more commonly executed between an insurer and TPA than
between an insurer and plan sponsor
C) They may include financial penalties for missed standards
D) They help evaluate insurer/TPA performance
Answer: B (PSAs are more common between insurer and plan sponsor, less
common with a TPA)
Q13. All the following statements correctly describe premium preparation and
remittance, EXCEPT:
A) Self-administration means the in-house plan administrator collects and
remits premiums directly to the insurer
B) Insurer-administered arrangements involve billing plan members directly
C) List billing separates administration from premium collection
D) Premiums are typically due monthly
Answer: B (This isn't how insurer-administered remittance typically works —
the self-administered description in A is actually correct, making another
option the exception; flagged answer per source: the false statement is that
self-administration does NOT involve in-house collection)
Q14. All the following statements correctly describe present value, EXCEPT:
A) Present value discounts future cash flows to today's dollars
B) The higher the discount rate, the lower the present value
C) The higher the discount rate, the higher the present value
D) Present value calculations are used to determine reserve requirements
Answer: C (This is false — higher discount rate means LOWER present value)
Q15. All the following statements correctly describe the functional approach to
benefits plan design, EXCEPT:
, A) It analyzes employee needs by category
B) Plan sponsors must balance compensation elements with the benefits
employees need
C) It ignores probationary periods
D) It considers protection-oriented vs. accumulation-oriented benefits
Answer: C (The functional approach does account for probationary/waiting
periods)
Q16. All the following statements correctly describe the properties of
probability, EXCEPT:
A) Probability values range from 0 to 1
B) The denominator represents the number of outcomes that satisfy the
condition
C) The numerator represents the number of outcomes that satisfy the
condition
D) The sum of all possible outcome probabilities equals 1
Answer: B (It's actually the numerator, not denominator)
Q17. All the following statements correctly describe the role of actuaries,
EXCEPT:
A) Setting premium rates
B) Determining reserve requirements
C) Compliance with tax legislation is their main function
D) Analyzing mortality and morbidity data
Answer: C (Tax compliance is part of the role but not the main function)
Q18. All the following statements describe general administration expenses
typically included in determining gross premium rates, EXCEPT:
A) Cost of servicing the group
B) Cost of paying claims
C) Administrative overhead
D) Policy issuance costs
Answer: B (This is a claims administration expense, not general
administration)
Q19. All the following types of insurance are contracts of indemnity, EXCEPT:
A) Health insurance
B) Property insurance
C) Life insurance
D) Disability insurance
Answer: C (Life insurance is a valued contract, not a contract of indemnity)
Q20. Danika Novikov disclosed her 15% ownership of Haliburton Insurance
and provided the commission scale, but did not disclose that the commission
Answers 100% Guarantee Pass
Q1. A group contract generally defines offsets used to reduce the benefit
payable under a long-term disability (LTD) plan. Which statement correctly
describes direct offsets?
A) They include dependent life insurance proceeds and dental benefits
B) They include primary benefits payable under C/QPP disability pensions and
Workers' Compensation (WC) benefits
C) They include employer-paid pension contributions only
D) They include health care spending account credits
Answer: B
Q2. A single-employer plan sponsor may want to cover which of the following
categories of individuals under its group benefits plan?
A) Only active permanent employees
B) Only unionized employees and their dependents
C) Active permanent employees and dependents, surviving dependents of
deceased employees, and employees temporarily separated due to layoffs,
leave, military duty, or strikes
D) Only retirees and their spouses
Answer: C
Q3. A type of service offered under a third-party administrator's (TPA) claims
settlement only arrangement is:
A) Negotiating premium rates with insurers
B) Adjudicating and paying claims
C) Marketing the plan to prospective members
D) Setting reserve requirements
Answer: B
Q4. According to CLHIA guidelines on insurance product disclosure, the plan
description provided to each individual insured under a group contract
includes:
A) The insurer's internal profit margins
B) Other members' medical history
C) The name of the plan sponsor, insurer, and group policy number, plus
claims provisions (how to submit a claim and proof-of-loss time limits)
D) The commission structure paid to the broker
Answer: C
,Q5. Aiesha invested $1,000 at 6% simple interest annually. Reggie invested
$1,000 at 6% compounded semiannually. How much will they accumulate in
total after two years?
A) $2,120
B) $2,200
C) $2,246
D) $2,300
Answer: C ($1,120 + $1,126 = $2,246)
Q6. All the following claims charges are included in an experience analysis for
LTD benefits, EXCEPT:
A) Incurred claims
B) Claims reserves
C) A cost trend factor
D) Earned premium
Answer: C (Cost trend factors are used for health care/dental, not LTD)
Q7. All the following statements correctly describe a morbidity rate, EXCEPT:
A) It measures the incidence of sickness/accidents in a population
B) It does not vary by sex and age
C) It is used to price disability and health benefits
D) Fewer credible data sources exist for morbidity than mortality
Answer: B (Morbidity rate does in fact vary by sex and age)
Q8. All the following statements correctly describe an individual association
benefits plan, EXCEPT:
A) Coverage is available to members of a professional or trade association
B) There are employer contributions to individual association benefits plans
C) Premiums are generally paid by the individual member
D) It is a way for self-employed individuals to access group-type coverage
Answer: B (There are no employer contributions)
Q9. All the following statements correctly describe CDAnet, EXCEPT:
A) It allows electronic submission of dental claims
B) It reduces the need for paper claim forms
C) Predeterminations requiring X-rays or study models can be sent via
CDAnet
D) It connects dental offices directly to insurers/payors
Answer: C (Such predeterminations cannot be sent via CDAnet)
Q10. All the following statements correctly describe deductibles used in group
benefit plans, EXCEPT:
A) A deductible is a fixed dollar amount paid by the plan member before
benefits are paid
B) Coinsurance has inflation and utilization changes built into it
,C) Deductibles help control claims costs
D) Deductibles may apply per claim or per benefit year
Answer: B (This describes deductibles, not coinsurance — coinsurance does
NOT have this built in)
Q11. All the following statements correctly describe examples of a physical
hazard, EXCEPT:
A) Poor building wiring increasing fire risk
B) Grayson smokes about 5 cigarettes a day and plans to quit, but indicated
he's a nonsmoker on his renewal
C) An icy walkway with no salt applied
D) A poorly maintained furnace
Answer: B (This is an example of a moral hazard, not physical)
Q12. All the following statements correctly describe performance standards
agreements (PSAs) in group benefits plan administration, EXCEPT:
A) PSAs set measurable service targets
B) They are more commonly executed between an insurer and TPA than
between an insurer and plan sponsor
C) They may include financial penalties for missed standards
D) They help evaluate insurer/TPA performance
Answer: B (PSAs are more common between insurer and plan sponsor, less
common with a TPA)
Q13. All the following statements correctly describe premium preparation and
remittance, EXCEPT:
A) Self-administration means the in-house plan administrator collects and
remits premiums directly to the insurer
B) Insurer-administered arrangements involve billing plan members directly
C) List billing separates administration from premium collection
D) Premiums are typically due monthly
Answer: B (This isn't how insurer-administered remittance typically works —
the self-administered description in A is actually correct, making another
option the exception; flagged answer per source: the false statement is that
self-administration does NOT involve in-house collection)
Q14. All the following statements correctly describe present value, EXCEPT:
A) Present value discounts future cash flows to today's dollars
B) The higher the discount rate, the lower the present value
C) The higher the discount rate, the higher the present value
D) Present value calculations are used to determine reserve requirements
Answer: C (This is false — higher discount rate means LOWER present value)
Q15. All the following statements correctly describe the functional approach to
benefits plan design, EXCEPT:
, A) It analyzes employee needs by category
B) Plan sponsors must balance compensation elements with the benefits
employees need
C) It ignores probationary periods
D) It considers protection-oriented vs. accumulation-oriented benefits
Answer: C (The functional approach does account for probationary/waiting
periods)
Q16. All the following statements correctly describe the properties of
probability, EXCEPT:
A) Probability values range from 0 to 1
B) The denominator represents the number of outcomes that satisfy the
condition
C) The numerator represents the number of outcomes that satisfy the
condition
D) The sum of all possible outcome probabilities equals 1
Answer: B (It's actually the numerator, not denominator)
Q17. All the following statements correctly describe the role of actuaries,
EXCEPT:
A) Setting premium rates
B) Determining reserve requirements
C) Compliance with tax legislation is their main function
D) Analyzing mortality and morbidity data
Answer: C (Tax compliance is part of the role but not the main function)
Q18. All the following statements describe general administration expenses
typically included in determining gross premium rates, EXCEPT:
A) Cost of servicing the group
B) Cost of paying claims
C) Administrative overhead
D) Policy issuance costs
Answer: B (This is a claims administration expense, not general
administration)
Q19. All the following types of insurance are contracts of indemnity, EXCEPT:
A) Health insurance
B) Property insurance
C) Life insurance
D) Disability insurance
Answer: C (Life insurance is a valued contract, not a contract of indemnity)
Q20. Danika Novikov disclosed her 15% ownership of Haliburton Insurance
and provided the commission scale, but did not disclose that the commission
