Which of the following is NOT a main category of expenses?

Prepare for the CAS Exam 6 with detailed study materials. Use flashcards and multiple-choice questions, each with hints and explanations, to get exam-ready!

Multiple Choice

Which of the following is NOT a main category of expenses?

In actuarial cost modeling for insurers, the main expense groups focus on the costs tied to underwriting and handling claims. The two primary categories are Loss Adjustment Expenses (LAE), which cover the costs to investigate, defend, and settle claims, and Underwriting & Investment Expense, which includes acquisition costs and ongoing underwriting and investment-related expenses. Taxes aren’t treated as one of these core operating expense categories; they’re a separate financial obligation and are not part of the main expense loading used in this context. So the item that isn’t a main category is Taxes. The other two options fit as main expense categories, while “None of the above” would be incorrect because one option isn’t a main category.

In actuarial cost modeling for insurers, the main expense groups focus on the costs tied to underwriting and handling claims. The two primary categories are Loss Adjustment Expenses (LAE), which cover the costs to investigate, defend, and settle claims, and Underwriting & Investment Expense, which includes acquisition costs and ongoing underwriting and investment-related expenses. Taxes aren’t treated as one of these core operating expense categories; they’re a separate financial obligation and are not part of the main expense loading used in this context. So the item that isn’t a main category is Taxes. The other two options fit as main expense categories, while “None of the above” would be incorrect because one option isn’t a main category.

More practice questions