Question

What is the portfolio withdrawal premium?

a.

A premium paid by the ceding insurer to the reinsurer to cover corresponding policies in force on the date when the new treaty agreement commenced

b.

A premium paid by the reinsurer to the ceding insurer to cut off the cover completely on the date of termination

c.

A premium paid by the reinsurer to the ceding insurer corresponding to polices that are running off

d.

A premium paid by the ceding insurer to the reinsurer to terminate the treaty immediately

Answer: (c).A premium paid by the reinsurer to the ceding insurer corresponding to polices that are running off Explanation:The reinsurer may cut off the cover completely on the date of termination by paying to the ceding insurer a portfolio withdrawal premium corresponding to polices that are running off.

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Q. What is the portfolio withdrawal premium?

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