Question

What is ceding commission?

a.

The commission paid by the ceding insurer to the reinsurer(s)

b.

The commission paid by the reinsurer(s) to the ceding insurer

c.

The premium paid by the ceding insurer to the reinsurer(s)

d.

The premium paid by the reinsurer(s) to the ceding insurer

Posted under IC85 Reinsurance Management

Answer: (a).The commission paid by the ceding insurer to the reinsurer(s) Explanation:Ceding commission is the commission paid by the reinsurer(s) to the ceding insurer to compensate for their original commissions and brokerages, acquisition cost, costs of keeping the business on the books, and administration expenses.

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