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 the relationship between insurance companies and insureds through brokers?

Broker-directed policies without insurer consent
Limited liability on behalf of insurance companies
Obligated to insureds through contracts created by agents/brokers
No direct obligation to insureds

The correct answer is: Obligated to insureds through contracts created by agents/brokers

Insurance companies and insureds have an obligated relationship through contracts created by agents/brokers. This means that the insurance company has a direct responsibility to provide coverage as outlined in the insurance policy, while the insured is responsible for paying premiums and adhering to the terms of the contract. Options A and B are incorrect because they suggest that brokers have full control over the policies and liability for the insurance companies, which is not the case. Option D is also incorrect because insurance companies do have an obligation to the insured through the contract created by the broker.