Question

How is the ceding commission calculated?

a.

By applying the agreed percentage to the ceded premium

b.

By applying the agreed percentage to the original premium paid by the insured

c.

By applying the agreed percentage to the reinsurance premium

d.

By applying the agreed percentage to the sum insured

Posted under IC85 Reinsurance Management

Answer: (a).By applying the agreed percentage to the ceded premium Explanation:The ceding commission is calculated on the ceded premium by applying the agreed percentage as set out in the treaty slip and agreed. This is incorporated in the treaty document.

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