PRC Practice Questions - Professional Reinsurance Certification Exam - PRC Practice Questions - Professional Reinsurance Certification Exam

Question 1

What is the fundamental difference between proportional and non-proportional reinsurance?

Proportional covers property while non-proportional covers liability In proportional the reinsurer shares premium and losses in a fixed ratio; in non-proportional the reinsurer pays only losses above an attachment point Proportional is always treaty and non-proportional is always facultative Non-proportional reinsurance does not require a ceding commission because there is no shared premium

Correct Answer:

In proportional the reinsurer shares premium and losses in a fixed ratio; in non-proportional the reinsurer pays only losses above an attachment point

Question 2

A cedent places a 40% quota share treaty. The treaty has a ceding commission of 30%. Subject premium is $10,000,000 and incurred losses are $4,500,000. What is the reinsurer's net underwriting result before expenses?

Profit of $400,000 Profit of $1,200,000 Loss of $300,000 Loss of $500,000

Correct Answer:

Loss of $300,000

Question 3

In a surplus share treaty, how is the reinsurer's participation on any given risk determined?

By a fixed percentage set for every policy in the treaty By the cedent's retention line; the reinsurer takes the excess over the retention, up to the treaty's line limit By the losses incurred in the prior year By the reinsurer's own capital base

Correct Answer:

By the cedent's retention line; the reinsurer takes the excess over the retention, up to the treaty's line limit

Question 4

Which reinsurance structure is most commonly used to protect a cedent against an unforeseen accumulation of losses from a single catastrophic event?

Quota share treaty Per-risk excess of loss Per-occurrence (catastrophe) excess of loss Facultative proportional

Correct Answer:

Per-occurrence (catastrophe) excess of loss

Question 5

What is clash reinsurance?

Reinsurance that automatically replaces expired limits on the original treaty A non-proportional casualty structure that responds when two or more of the cedent's policies are involved in the same occurrence A dispute resolution treaty between two reinsurers A facultative placement that overlaps with an existing treaty

Correct Answer:

A non-proportional casualty structure that responds when two or more of the cedent's policies are involved in the same occurrence

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About this Exam

Prepare with the PRC Practice Questions - Professional Reinsurance Certification Exam practice quiz. This question bank includes 100 questions covering reinsurance, loss, treaty, risk, and catastrophe. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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PRC Practice Questions - Professional Reinsurance Certification Exam

This practice set contains 100 questions from the matching question bank and focuses on reinsurance, loss, treaty, risk, and catastrophe. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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PRC Practice Questions - Professional Reinsurance Certification Exam

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