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Reinsurance Management

liability for which can also be withdrawn from
the outgoing reinsurers. This is done by debiting
the outgoing reinsurers with their proportion of
90% or 100% of estimated outstanding losses
which is termed "portfolio loss withdrawal".

The same amount is credited for their respective
proportion to the incoming reinsurers, which is
termed as "portfolio loss entry". Should there be
material difference between losses finally settled
and portfolio loss amount, such entries, can be
reopened and adjusted by invoking the relevant
provision in the treaty contract.

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are withdrawn from all the outgoing reinsurers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

This method is usually followed in most of the
property proportional treaties as it saves

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