Page 63 - Reinsurance Management IC85

The Insurance Times

b. For an outward treaty: A similar procedure
is followed and the copy to be retained in
India is stamped with Rs.5/- special adhesive
stamp.

c. If the agreement is between two Indian
Companies, the document is got stamped by the
ceding company.

Q. Explain the "clean-cut method".

Ans: When adjusting accounts for settlement of premium with
reinsurers, we have to take care of the liability for
unexpired risks at the cancellation date or at the end
of treaty year. There may also be claims outstanding
as on that date.

Where both "portfolio premium" and "portfolio loss" are
withdrawn from all reinsurers for the year at the end
of treaty and corresponding entries are given to the
reinsurers on the treaty for the new year, this method
is known as clean-cut method.

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