Page 275 - Reinsurance Management IC85

Reinsurance Management

Commission 400000

Claims Paid 350000

Management Expenses

@ 3% 30000

Portfolio Withdrawl Premium 300000

Loss 200000

(b) Total 1280000

Profit for the year 2010 70000

(a - b)

Premium = 10 Lakhs

10% of Premium = 1 Lakh

25% on above = 25% of 1 Lakh

= 25000

Profit = 70000

(-) 10% of Premium = (100000)

(300000)

.: No profit to be distributed as the figure is

negative.

So, total profit commission for 2010 = Rs. 25000

ii) Three years average basis

2008 Profit for the year = 480000

2009 Loss for the year = (100000)

2010 Profit for the year = 70000

Total Profit for 3 years = 450000

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