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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Which reinsurance method involves sharing losses above a certain amount but not exceeding a limit?

Proportional Reinsurance
Non-Proportional Reinsurance
Treaty Reinsurance
Facultative Reinsurance

The correct answer is: Non-Proportional Reinsurance

Non-Proportional Reinsurance, also known as Excess of Loss Reinsurance, involves sharing losses above a certain amount, known as the "excess amount". This type of reinsurance is not limited to a specific portion of the ceding company's overall risk, unlike Proportional Reinsurance. Treaty Reinsurance is a type of reinsurance in which the ceding company agrees to transfer a predetermined portion of their risk to the reinsurer, while Facultative Reinsurance involves the reinsurer evaluating and choosing which specific risks they want to cover from the ceding company rather than covering all potential risks like Treaty Reinsurance does. Therefore, B is the correct answer.