Page 289 - Reinsurance Management IC85
P. 289
The Insurance Times
Management Expenses : 7%
Profit for 2009 : Rs. 5,00,000
Loss for 2010 : Rs. 13,00,000
Profit commission 25% on profit upto 10%
and 35% thereafter.
Ans: (a)Premium = 85,00,000
10% Premium = 85,00,000
Profit = 35,55,000
.: 25% of 10% of Premium = 25% (10% of 850000
= Rs. 212500 - (A)
.: Profit = 3555000
(-) 10% of Premium = 850000
2705000
.: 35% of 2705000 = 946750 - (B)
.: Total Profit Commission = (A) + (B)
= 1159250
(b) Three years average basis
Profit for 2009 = 50000
Loss for 2010 = (1300000)
Profit for 2011 = 3555000
2755000
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