AIAF 114: Assignment 1 Questions With 100% Correct Answers.

A common set of accounting standards and procedures used in the preparation of financial statements to ensure consistency of presentation and reported results. - Generally Accepted Accounting Principles (GAAP) The accounting principles and practices that are prescribed or permitted by an insurer's domiciliary state and that insurers must follow. - Statutory Accounting Principles (SAP) The valuation of an asset based on financial models instead of market price. - Mark-to-model The value of an asset or liability based on its current market price. - Mark-to-market An accounting approach in which the focus is to coordinate the timing of income and expense recognition so that both occur when the triggering event that is the focus of the contract occurs. - Deferral-matching A current asset representing monies owed to a business by customers for good or services rendered. - Accounts Receivable Amounts for losses and loss adjustment expenses owed to an insurer under reinsurance agreements covering paid losses. - Reinsurance Recoverables The recognition of the cost of acquiring a new customer over the duration of an insurance contract. - Deferred Acquisition Costs The amount the insurer estimates and sets aside to pay on an existing claim that has not been settled. - Reserve The portion of policy premium for the unexpired portion of the policy. - Unearned Premium An accounting approach that focuses on the value of assets or liabilities that exist as of the balance sheet date. - Asset-LiabilityA loss reserve assigned to an individual claim. - Case Reserve The portion of written premiums that corresponds to coverage that has already been provided. - Earned Premiums Financial standards developed by the International Accounting Standards Board (IASB). - International Financial Reporting Standards (IFRS) The market value, either actual or estimated, of an asset or a liability. - Fair Value A model for valuing insurance contract liabilities arising from a group of insurance contracts that is based on the expected present value of future net cash outflows and a risk margin. - Building Block Approach (BBA) A model for valuing insurance contract liabilities arising from a group of insurance contracts that is based on the present value of premiums for unexpired coverage and the present value of probabilityweighted future payments for incurred losses. - Premium Allocation Approach (PAA)