Alberta General Insurance Level 1 Practice Exam

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Ace your Alberta General Insurance Level 1 Exam with our comprehensive practice quiz. Tailored to mimic the real test, our quiz offers detailed explanations, expert tips, and all you need to succeed. Start your path to becoming a licensed professional today!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What does it mean to cede in the context of insurance?

To challenge a claim
To reinsure liability with another company
To cancel a policy
To increase premium rates

The correct answer is: To reinsure liability with another company

Ceding in the context of insurance refers to the process of an insurance company transferring a portion of its risk to another insurance company, called a reinsurer. This is done in order to minimize the potential financial losses that may result from a covered event. Option A, challenging a claim, does not accurately describe ceding as it is related to risk transfer, not dispute resolution. Option C, canceling a policy, is not necessarily related to transferring risk but rather terminating coverage. Option D, increasing premium rates, is not the same as ceding as it pertains to the cost of insurance, not risk transfer.