Special surplus funds are portions of surplus allocated or appropriated for a specific purpose. Special surplus funds usually are allocated voluntarily but also may be required by an insurance regulator. Which one the following is NOT an example of special funds:

A. Group contingency reserve

B. Group annuity contingency reserve

C. Participation is separate accounts

D. Guarantee Loan

An entity method is applied to corporate joint ventures and to investments in certain less than majority-owned companies in circumstances where:

A. the investment is for the long term

B. the investor company has the ability to exercise significant influence over the operating and financial policies of the investee company.

C. Both A and B

D. Neither A nor B

An attitude that includes a questioning mind and a critical assessment of audit evidence is called:

A. Operational skepticism

B. Audit skepticism

C. Professional skepticism

D. None of the above

Reduction for salvage is: A. the estimated amount payable by the vendor from the disposition of damaged or recovered property

B. the actual amount receivable by the claimer from the temperament of damaged property

C. the actual amount payable by the investor from the disposition of damaged or recovered property

D. the estimated amount receivable by the insurer from the disposition of damaged or recovered property

The options for securities that insurance entities own and can deliver if the options are exercised by the option buyers are called:

A. concealed transactions

B. covered-call options

C. financial servicing

D. safekeeping