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Free L&H Practice Test
20 questions sampled from our Life & Health bank. AI explanations shown after each answer.
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Question 1 of 20
0 correct so far
National-LH-I Life Policy Types
medium
Which statement best distinguishes a Quota Share reinsurance treaty from a Surplus Share treaty?
A
In a Quota Share, the cedent and reinsurer share a fixed percentage of every premium and every loss on every covered policy; in a Surplus Share, the reinsurer assumes only the portion of each risk exceeding the cedent's retention 'line,' so smaller risks may be 100% retained
B
Quota Share covers only catastrophic losses above a per-occurrence threshold, while Surplus Share covers all losses pro rata
C
Both treaties operate identically; the labels are interchangeable
D
Surplus Share is a non-proportional excess-of-loss treaty; Quota Share is a facultative arrangement
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