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SOFE Exam SOFA-CFE Topic 3 Question 69 Discussion

Actual exam question for SOFE's SOFA-CFE exam
Question #: 69
Topic #: 3
[All SOFA-CFE Questions]

Which insurance arrangement, which involved insurance of a loss that had previously occurred, similarly was found not to be insurance for federal income tax purposes?

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Suggested Answer: D

by Mariann at Apr 19, 2023, 08:24 AM

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Adelina
1 months ago
Tax reserves? Now that's a new one. Is the IRS just making up insurance terms now? I'm sticking with B) retroactive, it's the only one that makes any sense.
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Naomi
12 hours ago
Yeah, tax reserves are important for insurance companies to ensure they can cover future claims. Retroactive insurance does make the most sense in this context.
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Helaine
9 days ago
Yeah, I agree. Tax reserves and retroactive both seem like valid options in this case.
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Viola
16 days ago
I think retroactive makes sense too, it's like covering a loss that already happened.
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Ryan
16 days ago
I think you're right, retroactive insurance is when coverage is provided for a loss that has already occurred.
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Phillip
20 days ago
Tax reserves are actually a common term in insurance, it's used to cover future claims.
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Edna
23 days ago
Tax reserves are actually a common term in insurance, it's used to set aside funds for potential future claims.
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Velda
1 months ago
Annual statement, really? That's just basic accounting, not insurance. Gotta be B) retroactive, even if it sounds a bit sketchy.
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Samira
2 days ago
It does sound a bit sketchy, but I think retroactive makes the most sense.
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Art
7 days ago
Yeah, retroactive seems like the best option here.
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Rolf
14 days ago
I agree, annual statement doesn't sound like insurance at all.
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Cletus
16 days ago
Exactly, as long as it meets the criteria, it's considered insurance.
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Kanisha
23 days ago
True, it's all about how the arrangement is structured.
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Han
23 days ago
But it's still considered insurance for federal income tax purposes.
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Chauncey
29 days ago
I agree, retroactive insurance does sound a bit sketchy.
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Matthew
1 months ago
Hmm, this one's tricky. I'm gonna go with B) retroactive, seems like the only option that fits the description. Though I gotta say, the IRS must have a sense of humor to call that 'insurance'.
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Gerri
2 months ago
I'm not sure, but I think D) Tax reserves could also be a possible answer because it involves setting aside funds for potential future losses.
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Marica
2 months ago
I agree with Sherly, retroactive insurance involves covering losses that have already happened.
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Sherly
2 months ago
I think the answer is B) retroactive.
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Lynna
2 months ago
Whoa, retroactive insurance? That's like trying to insure your house after it's already burned down. Pretty sure that's not how it works, am I right?
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Marya
10 days ago
C) reserved
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Jackie
19 days ago
B) retroactive
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Geoffrey
22 days ago
A) annual statement
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