Chapter 6 : An Overview of the Annual Statement

Question 1

annual statement consist of

Answer 1

balance sheet in the form of separated pages for assets, liabilities, surplus and other funds, a summary of operations and statement of cash flows

Question 2

two kinds of assets

Answer 2

admitted assets and non-admitted assets

Question 3

differences between admitted assets and nonadmitted assets

Answer 3

admitted assets are those assets that state insurance law apermits to be included on the assets page of the annual statement. while,
non admitted assets are those assets that state insurance law prohibits from being included on the assets pages.

Question 4

perbedaan “aset yang ditunjukkan” di annual report balance sheets sama annual statement asset

Answer 4

annual report balance sheet -> all insurer’s assets

annual statement assets -> total of admitted assets only

Question 5

klasifikasi dari admitted assets

Answer 5

invested assets, other admitted assets, and deferred, due and accrued income.

Question 6

invested assets are….

Answer 6

assets that produce income in the form of interest, rent, dividends, and capital gains (insurer major portion consist of debt instruments, such as bonds, mortgage loans, and other investment that promise payment of fixed amounts on specified dates)

Question 7

insurer’s other admitted assets iclude…

Answer 7

• reinsurance ceded (amounts recoverable from reinsurers, commissions and expense allowance due from reinsurers and experience ratings and other refunds due)
• federal income tax recoverable (represent the amount of federal income taxes the insurer overpaid and expects to receive as a refund)
• receivables from parent, subsidiary, or affiliate companies
• other items

Question 8

reinsurance is

Answer 8

a transaction between two insurance companies in which one company (the ceding company) transfers part or all of its insurance risk to another company (the insurer)

Question 9

deferred, due an accrued income consist of

Answer 9

deferred and uncollected life insurance premiums and annuity considerations
accident and health insurance premiums due and unpaid
investment income due and accrued

Question 10

net premium formula

Answer 10

net premium = gross premium - loading

Question 11

nonadmitted assets include :

Answer 11

1. partially admitted assets (assets for which a portion of the value is admitted and the remainder is nonadmitted) and entirely nonadmitted assets (those acquired in carrying out the normal process of doing business : furniture, automobiles, most computer software, office supplies)