SOFE Exam AFE Topic 3 Question 76 Discussion

Actual exam question for SOFE's AFE exam

Question #: 76
Topic #: 3

[All AFE Questions]

_allow investments to be made, up to a certain percent of invested or total admitted assets, in assets that do not otherwise meet regulatory requirements. If their domiciliary jurisdiction regulations have a this, a life insurer with a business purpose for doing so can make a limited amount of mortgage loans that do not meet regulatory requirements without a reduction in surplus. However, some jurisdictions do exercise some extraterritorial jurisdiction related to it.

ALoan application

BBasket clause

CUnderwriting agreement

DNone of these

Show Suggested Answer

Suggested Answer: A

by Art at May 19, 2024, 01:31 AM

Limited Time Offer

25%

Off

Get Premium AFE Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Edison

2 months ago

The basket clause, huh? Sounds like a great way to get around the rules and make some risky investments. As long as it's under the limit, I guess the regulators won't mind. Where can I get one of those?

upvoted 0 times

...

Jamie

2 months ago

Well, if the question is asking about a provision that allows insurers to invest in non-compliant assets, then the basket clause has to be the answer. Seems straightforward enough.

upvoted 0 times

Vilma

11 days ago

D) None of these

upvoted 0 times

...

Cora

1 months ago

C) Underwriting agreement

upvoted 0 times

...

Mozell

1 months ago

B) Basket clause

upvoted 0 times

...

Zona

1 months ago

A) Loan application

upvoted 0 times

...

Teri

2 months ago

Haha, 'basket clause'? Sounds like something you'd find at the grocery store, not in an insurance regulation. But I guess that's the right answer here.

upvoted 0 times

Isreal

23 days ago

User 3: Interesting, I didn't know that. Thanks for the info!

upvoted 0 times

...

Royal

28 days ago

User 2: Yeah, that's correct. It allows investments in assets that don't meet regulatory requirements.

upvoted 0 times

...

Veronika

1 months ago

User 1: I think the answer is B) Basket clause.

upvoted 0 times

...

Bobbye

3 months ago

I'm not sure about the basket clause, but I'm pretty confident it's not any of the other options. Definitely not a loan application or underwriting agreement.

upvoted 0 times

Dortha

2 months ago

C) Underwriting agreement

upvoted 0 times

...

Alaine

2 months ago

B) Basket clause

upvoted 0 times

...

Elvera

2 months ago

A) Loan application

upvoted 0 times

...

Ezekiel

3 months ago

The basket clause seems to be the correct answer here. It allows insurers to invest in non-compliant assets up to a certain limit, which is what the question is describing.

upvoted 0 times

...