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 is proportional reinsurance?

A flat rate reinsurance contract
A reinsurance contract based on flat fees
A reinsurance where risk and premiums are shared proportionally
A reinsurance where risk is transferred entirely

The correct answer is: A reinsurance where risk and premiums are shared proportionally

Proportional reinsurance is a type of reinsurance where the risk and premiums are shared proportionally between the insurer and the reinsurer. This means that both parties share a portion of the risk and receive a corresponding portion of the premiums. Option A and B are incorrect because they mention "flat" rates or fees, which implies a fixed amount rather than a proportional sharing of risk and premiums. Option D is incorrect because it states that the risk is transferred entirely, which is not the case in proportional reinsurance since both parties share the risk.