STRAWBERRY WAFFLES

Question 1

The Public-Private Partnership Program of the Philippines is a flagship program of transparency, accountability, and sustained partnership with the private sector.

Answer 1

TRUE

Question 2

In some cases, the grantor may provide other items to the service concession operator. If such assets form part of the consideration payable by the grantor for these services, these assets are recognized as government assistance.

Answer 2

FALSE

Question 3

Insurer which accepts part of a risk in a reinsurance.

Answer 3

REINSURER

Question 4

These are cash flows arising from the costs of selling, underwriting, and starting a group of insurance contracts that are directly attributable to the portfolio of insurance contracts to which the group belongs.

Answer 4

INSURANCE ACQUISITION CASH FLOWS

Question 5

An arrangement governed by a contract between the operator and the government that sets out performance standards, mechanisms for adjusting prices or rates and arrangement for arbitrating disputes is called: (select all that apply)

Answer 5

I. BUILD-OPERATE-TRANSFER
II. REHABILITATE-OPERATE-TRANSFER
III. PUBLIC-TO-PRIVATE SERVICE CONCESSION AGREEMENT

Question 6

Which of the following is an insurance risk?

Answer 6

PURE RISK

Question 7

In general, insurance acquisition cash flows are recognized as asset or liability when the entity pays or receives the cash flows before the group is recognized. When the group is recognized, the asset or liability is derecognized.

Answer 7

TRUE

Question 8

Time apportionment method calculates unearned premium reserve both for policies that are annual and non-annual periods.

Answer 8

TRUE

Question 9

According to PFRS 17, an insurance contract is not derecognized when_______

Answer 9

ITS TERMS HAVE BEEN MODIFIED AND THE MODIFICATION IS NOT SUBSTANTIVE

Question 10

PFRS 17 applies to_______.

Answer 10

PROPERTY INSURANCE

Question 11

According to PFRS 17, insurance service result is recognized in _________.

Answer 11

PROFIT OR LOSS

Question 12

In insurance contracts, premiums are regarded as being earned evenly over the period of the policy from the inception date.

Answer 12

TRUE

Question 13

In a contractual service concession arrangement, the operator shall account for revenue and costs relating to construction or upgrade service in accordance with PFRS 15-Revenue Contracts.

Answer 13

TRUE

Question 14

In accordance with PAS 23, borrowing costs attributable to the arrangement shall be recognized as an _____________ in the period in which they are incurred, unless the operator has a contractual right to receive an intangible asset.

Answer 14

EXPENSE

Question 15

If the assessment based on liability adequacy test shows that the carrying amount of its insurance liabilities is inadequate in the light of estimated future cash flows, the entire deficiency shall be recognized in _______________.

Answer 15

PROFIT OR LOSS

Question 16

Claims are liabilities or losses incurred of the insurer and is often used interchangeably with the term policy benefits or losses.

Answer 16

TRUE

Question 17

Defined as a reinsurance of a reinsurance assumed when the reinsurer will retrocede a whole or part of the risk accepted from the direct insurer to another reinsurer.

Answer 17

RETROCESSION

Question 18

PFRS 17 also applies to insurance contracts whereby the entity is the policyholder, rather than the issuer or insurer.

Answer 18

FALSE

Question 19

The “premium allocation approach” cannot be applied to which of the following insurance contracts?

Answer 19

INSURANCE CONTRACTS WITH SIGNIFICANT VARIABILITY IN THEIR FULFILLMENT CASH FLOWS

Question 20

The PFRIC 12 provides the accounting principles for recognizing and measuring the obligations and related rights in service concession arrangements. The issues addressed may include the following:

Answer 20

I. OPERATING SERVICES
II. BORROWING COST
III. SUBSEQUENT ACCOUNTING TREATMENT OF A FINANCIAL ASSET AND AN INTANGIBLE ASSET

Question 21

The policyholder under a reinsurance contract is called________

Answer 21

CEDANT

Question 22

The terms of the contractual arrangement may require the operator to:

Answer 22

I. MAINTAIN THE INFRASTRUCTURE TO A SPECIFIC LEVEL OF SERVICEABILITY
II. RESTORE THE INFRASTRUCTURE TO A SPECIFIED CONDITION BEFORE IT IS HANDED OVER TO THE GRANTOR AT THE END OF THE REPORTING PERIOD

Question 23

PFRS 17 prescribes the principles for the recognition, measurement, presentation, and disclosure of insurance contracts by an insurer. It applies to:

Answer 23

I. INSURANCE AND REINSURANCE CONTRACTS ISSUED BY AN INSURER
II. REINSURANCE CONTRACTS HELD BY AN INSURER
III. INVESTMENT CONTRACTS WITH DISCRETIONARY PARTICIPATION FEATURES ISSUED BY AN INSURER

Question 24

A significant feature of most service concession arrangements is the public service nature of the obligation undertaken by the private sector.

Answer 24

FALSE

Question 25

Which of the following types of insurance contract would probably not be covered by PFRS 17?

Answer 25

PENSION PLAN

Question 26

PFRS 17 requires an entity to combine its insurance contracts into portfolios and further subdivide the insurance contracts comprising each portfoliio into groups. Which of the following is not of the groups of insurance contracts within a portfolio?

Answer 26

THOSE THAT PAY PREMIUMS AT INITIAL RECOGNITION WHICH ARE TO BE MEASURED USING THE SIMPLIFIED APPROACH

Question 27

A form of reinsurance offered on an individual risk basis, and where the ceding insurer makes the offer of reinsurance and the reinsurer has the option to accept or reject the risk and quote the terms for acceptance

Answer 27

FACULTATIVE REINSURANCE

Question 28

______________ is the party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs.

Answer 28

INSURER

Question 29

Insurance contracts issued that are assets, insurance contracts issued that are liabilities, reinsurance contracts held that are assets and reinsurance contracts held that are liabilities should be presented in the statement of financial position in a consolidated manner.

Answer 29

FALSE

Question 30

This consists of insurance contracts with similar risks and managed together.

Answer 30

PORTFOLIO

Question 31

A reinsurance contract is an arrangement whereby the reinsurer, in consideration of a premium agrees to idemnify the principal ceding insurer against the loss, or part of the loss which the latter may sustain under the policy or policies that the insurer has written.

Answer 31

TRUE

Question 32

The total cost of a claim when settled and paid will consist of the following elements:

Answer 32

I. ACTUAL CLAIMS PAID TO THE INSURED PARTY, LESS RECOVERIES FOR SALVAGE AND REINSURANCE II. ALLOCATED CLAIMS EXPENSES III. UNALLOCATED CLAIMS EXPENSES

Question 33

The Philippines Financial Reporting Interpretations Committee 12 applies only if:

Answer 33

I. THE GRANTOR CONTROLS OR REGULATES WHAT SERVICES THE OPERATOR MUST PROVIDE WITH THE INFRASTRUCTURE, TO WHOM IT MUST PROVIDE THEM, AND AT WHAT PRICE II. THE GRANTOR CONTROLS THROUGH OWNERSHIP, BENEFICIAL ENTITLEMENT OR OTHERWISE, ANY SIGNIFICANT RESIDUAL INTEREST IN THE INFRASTRUCTURE AT THE END OF THE TERM OF THE ARRANGEMENT

Question 34

A method of computing unearned premium reserve that applies a specified percentage to the total premiums written in each class of business insurance.

Answer 34

FIXED PERCENTAGE METHOD

Question 35

PFRS 17 also applies to financial assets and financial liabilities of the insurer.

Answer 35

FALSE

Question 36

The risk accepted by the reinsurer is also referred as___________

Answer 36

INWARD REINSURANCE

Question 37

To the extent that it has an unconditional contractual right to receive cash or another asset from, or at the direction of, the grantor for the construction services. The operator recognized it as____________.

Answer 37

A FINANCIAL ASSET

Question 38

Entity A, as manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contract with Entity C, another insurance company. How does Entity B account for the insurance contract with Entity A according to PFRS 17?

Answer 38

EITHER GENERAL MODEL OR PREMIUM ALLOCATION APPROACH

Question 39

Entity A, as manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contract with Entity C, another insurance company. How does Entity C account for the insurance contract ceded by Entity B?

Answer 39

EITHER GENERAL MODEL OR PREMIUM ALLOCATION APPROACH

Question 40

Entity A, as manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contract with Entity C, another insurance company. How does Entity B account for the insurance contract ceded to Entity C?

Answer 40

MODIFICATION TO GENERAL MODEL FOR REINSURANCE CONTRACTS HELD

Question 41

Entity A, as manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contract with Entity C, another insurance company. The contract between Entity B and Entity C is__________

Answer 41

REINSURANCE CONTRACT

Question 42

In the service concession arrangement, PFRIC 12 specifies that the infrastructure shall be recognized as property, plant, and equipment of the operator because the contractual service arrangement conveys the right to control the use of the public service infrastructure to the operator.

Answer 42

FALSE

Question 43

The risk reinsured is also known as

Answer 43

OUTWARD REINSURANCE

Question 44

A new risk created by the contract is also an insurance risk.

Answer 44

FALSE

Question 45

The following are examples of insurance contracts, except:

Answer 45

SELF INSURANCE

Question 46

A premium deficiency arises when the unearned premium reserve is less than the anticipated claims and related expenses.

Answer 46

TRUE

Question 47

One of the groups of insurance contracts within a portfolio consists of those that pay premiums at initial recognition which are to be measured using the simplified approach.

Answer 47

FALSE

Question 48

Represent a primary source of revenue for an insurance company conducting general insurance business

Answer 48

PREMIUMS RECEIVED AND RECEIVABLE

Question 49

The unearned profit from a group of insurance contracts is referred to under PFRS 17 as ____________

Answer 49

CONTRACTUAL SERVICE MARGIN

Question 50

One of the characteristics of an insurance contract is the transfer of significant insurance risk from the issuer to the policyholder.

Answer 50

FALSE

Question 51

A group of insurance contracts is initially measured at the total of either fulfillment cash flows or the contractual service margin

Answer 51

FALSE

Question 52

In general, idemnification on insurance contracts is in the form of cash.

Answer 52

TRUE

Question 53

The purpose of unbundling the components of a contract (insurance and deposit components) is to allow the omission of assets and liabilities from its balance sheet or adjusting liabilities for any changes that have arisen if any unrealized gains and losses on assets have been realized

Answer 53

FALSE

Question 53

Refers to premiums that could have been written by insurance agents close to the end of the reporting period, but the policies may not have been booked-in at the end of the reporting period by the insurer due to adminstrative delays in the submission of returns by the agents

Answer 53

PIPELINE PREMIUMS

Question 53

A type of service concession arrangement wherein an operator constructs the infrastructure that will be used to provide the public service, operates and maintains that infrastructure for a specified period of time, obliged to hand over the infrastructure to the grantor in a specified condtion at the end of the period of the arrangement.

Answer 53

BUILD-OPERATE-TRANSFER (BOT)

Question 53

A type of insurance contract where the insurer directly accepts risk from the insured and assumes the sole obligation to compensate the insured in case of a loss event.

Answer 53

DIRECT INSURANCE CONTRACT

Question 54

Defined as the date from which an insurer effectively assumes the risk insured in respect of an insurance policy.

Answer 54

INCEPTION DATE

Question 55

The PFRS that covers most motor, travel, life, and property insurance contracts, as well as most reinsurance contracts.

Answer 55

PFRS 17

Question 56

These are expenses incurred directly in an individual claim and these include surveyor's fees, loss-adjusters' fees, and legal fees

Answer 56

ALLOCATED CLAIMS EXPENSES

Question 57

For concession arrangements, in providing the construction or upgrade services, the consideration received for receivable by the operator shall be recognized at its ___________

Answer 57

FAIR VALUE

Question 58

It is a demand by any party for payment by an insurer of a policy benefit on account of an alleged loss resulting from an event or events alleged to be covered by a policy of insurance.

Answer 58

INSURANCE CLAIM

Question 59

These are expense which relate to the reporting, recording, and adjustment of claims which may include the entire expense of the claims department such as office overheads, salaries of staff, and a proportion of senior management overheads.

Answer 59

UNALLOCATED CLAIMS EXPENSES

Question 60

An assessment of whether the carrying amount of an insurance liability needs to be increased or decreased based on a review of future cash flows.

Answer 60

LIABILITY ADEQUACY TEST

Question 61

Defined as risk other than financial risk transferred from the holder of a contract to the issuer

Answer 61

INSURANCE RISK

Question 62

The operator shall account for revenue and costs relating to operation services in accordance with _________

Answer 62

PFRS 15

Question 63

In a service concession arrangement, the operator recognizes a __________ if it has an unconditional contractual right to receive cash or other financial asset from or at a direction of the grantor in return for constructing or upgrading the public sector's asset.

Answer 63

FINANCIAL ASSET

Question 64

Defined as risk other than financial risk

Answer 64

INSURANCE RISK

Question 65

Refers to a type of insurance contract which is issued by one insurer (the reinsurer) to compensate another insurer (the cedant) for losses on one or more contracts issued by the cedant

Answer 65

REINSURANCE CONTRACT

Question 66

In accordance with ___________, borrowing costs attributable during the construction phase of the arrangement shall be an intangible asset.

Answer 66

PAS 23

Question 67

Represent a primary source of revenue for an insurance company conducting general insurance business

Answer 67

PREMIUMS

Question 68

For providing the construction or upgrade services, the consideration received or receivable by the operator shall be recognized at its _____________

Answer 68

FAIR VALUE

Question 69

Refers to an uncertain future event that is covered by an insurance contract and creates insurance risk

Answer 69

INSURED EVENT

Question 70

An arrangement whereby a government or other public sector body contracts with a private operator to develop or upgrade, operate, and maintain the grantor's infrastructure assets, such as roads, bridges, tunnels, airports, etc.

Answer 70

SERVICE CONCESSION ARRANGEMENT

Question 71

In a service concession arrangement, the operator recognizes an ____________ to the extent that it receives a right to charge users of the public service and such are contingent to the extent that the public uses the service.

Answer 71

INTANGIBLE ASSET

Question 72

A process of accounting for the components of an insurance contract

Answer 72

UNBUNDLING or UNBUNDLE

Question 73

These are commissions and agency related expenses incurred in securing premiums on general insurance policies that vary with and are primarily related, directed to, the securing of premiums on issue and renewal of insurance policies.

Answer 73

ACQUISITION COSTS

Question 74

The standard that interprets various standards in setting out the accounting requirement for public-to-private service concession arrangments

Answer 74

PFRIC 12

Question 75

Service concession arrangement is often referred to as ____________

Answer 75

PUBLIC-TO-PRIVATE ARRANGEMENT

Question 76

A type of reinsurance whereby the ceding insurer undertakes payment of all losses up to a pre-agreed amount. The balance of any loss that exceeds that agreed limit will be met by the reinsurers usually up to a contractual maximum.

Answer 76

NON-PROPORTIONAL REINSURANCE

Question 77

For providing the construction or upgrade services, the consideration received or receivable by the operator shall be recognized at its amortized cost

Answer 77

FALSE

Question 78

PFRS 17 does not apply to:

Answer 78

INSURANCE CONTRACTS WHEREBY THE ENTITY IS THE POLICYHOLDER, RATHER THAN THE ISSUER

Question 79

PFRS 17 specifically requres an insurer to offset insurance liabilities against related reinsurance assets in its statement of financial position

Answer 79

FALSE

Question 80

A party that has a right to compensation under an insurance contract if an insured event occurs.

Answer 80

POLICYHOLDER

Question 81

The percentage usually applied in the Philippines, following the fixed percentage method of calculating the unearned premiume reserve for general insurance policie such as fire and motor policies is

Answer 81

35-55%

Question 82

In general, insurance receivables are measured at fair value using the effective interest method and are subject to the impairment test

Answer 82

FALSE

Question 83

An insurance contract is onerous if the total of its fulfillment cash flows, any previously recognized acquisition cash flows, and any cash flows arising from the contract at initial recognition date is a net outflow of which the net outflow is recognized as a loss in the statement of profit or loss

Answer 83

TRUE

Question 84

In construction or upgrade services, the operator shall account for revenue and costs relating to construction or upgrade services in accordance with PAS 11, generally using the:

Answer 84

STAGE COMPLETION METHOD

Question 85

These are cash flows arising from the costs of selling, underwriting, and starting a group of insurance contracts that are directly attributable to the portfolio of insurance contracts to which the group belongs.

Answer 85

INSURANCE ACQUISITION CASH FLOWS

Question 86

A process of accounting for the components of an insurance contract.

Answer 86

UNBUNDLING or UNBUNDLE

Question 87

A process of accounting for the components of an insurance contract.

Answer 87

UNBUNDLING or UNBUNDLE

Question 88

The following are the essential elements in the definition of an insurance contract, except:

Answer 88

INSURANCE RISK HAS TO BE COMPENSATED THROUGH REINSURANCE

Question 89

A reinsurance asset is impaired if and only if:

Answer 89

I. There is objective evidence as a result of an event that occurred after initial recognition that the cedant may not receive all amounts due to it under the terms of the contract. II. That event has a reliably measurable impact on the amounts that the cedant will receive from the reinsurer.