Page 54 - Reinsurance Management IC85

Reinsurance Management

year. Deducting a reinsurance
commission of 30% this leaves a
portfolio of 35%. Giving same allowance
a percentage of 35 to 40 is then fixed
for determining portfolio premium.

iii. There are other methods known as eighth,
twelfth and twenty - fourth systems. The
premia ceded are divided into 12 parts for
each month of ceding and on assumption that
the majority of each month's premium will
usually expire in the middle of the month,
the unexpired portion for each month is
determined and adding the monthly figures,
the year end unexpired premium is calculated
and adjusted for reinsurance commission.

Q. What are the essential features of the
accounting clause in a treaty agreement?

Ans: The essential features of the Accounting clause are:-
a. Accounts are to be rendered after the close of
each quarter. Usually quarters close on 31st

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