The Method Used to Account for Insurance and Reinsurance Contracts

question 203

Multiple Choice

The method used to account for insurance and reinsurance contracts that do not transfer insurance risk is referred to as:

• A) Accounted revenue
• B) Premium deficiency
• C) Retained balance
• D) Deposit accounting

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Definitions:

Denominator

The bottom number in a fraction, indicating the total number of equal parts the whole is divided into.

Fraction

A mathematical expression representing a part of a whole or a part of a group by using two numbers, the numerator over the denominator.

Equivalent Fractions

Fractions that represent the same part of a whole, even though they have different numerators and denominators.