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      Question

      A catastrophe event occurs after year-end but before

      approval, affecting many policies. How should the insurer treat it?
      A Adjusting event; recognize additional claim provisions Correct Answer Incorrect Answer
      B Non-adjusting event; disclose nature and estimate Correct Answer Incorrect Answer
      C Ignore as future Correct Answer Incorrect Answer
      D Recognize only if reinsurance available Correct Answer Incorrect Answer
      E Capitalize as asset Correct Answer Incorrect Answer

      Solution

      If event occurred after the reporting period, it’s non-adjusting; disclose.

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