Question

How are premiums typically accounted for in reinsurance accounting?

a.

Gross premium

b.

Net premium

c.

Gross premium with deductions

d.

Net premium with deductions

Posted under IC85 Reinsurance Management

Answer: (b).Net premium Explanation:In reinsurance accounting, premiums are typically accounted for as net premiums. This means that the premiums are recorded after deducting any original acquisition costs, such as agency commission and other expenses incurred by the ceding insurer. Net premiums reflect the actual amount received by the ceding insurer for the reinsurance coverage.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. How are premiums typically accounted for in reinsurance accounting?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is the primary advantage of using a flat rate of commission for reinsurance accounting?

View solution

Q. What is the purpose of using a sliding scale commission for reinsurance accounting?

View solution

Q. What is the purpose of the provisional commission in reinsurance accounting?

View solution

Q. What are earned premiums?

View solution

Q. What is deducted from earned premiums?

View solution

Q. What are incurred losses?

View solution

Q. What is added to incurred losses?

View solution

Q. What is the purpose of a provisional commission?

View solution

Q. How is the provisional commission determined?

View solution

Q. What does a sliding scale of commission aim to do?

View solution

Q. What is the purpose of the table of "Sliding Scale of Commission"?

View solution

Q. What is the purpose of overriding commission?

View solution

Q. How can the overriding commission payable by the reinsurer be calculated?What is brokerage in reinsurance?

View solution

Q. How can the overriding commission payable by the reinsurer be calculated?

View solution

Q. How is the percentage of brokerage payable determined?

View solution

Q. What is profit commission in reinsurance?

View solution

Q. What are the two types of profit commission statements?

View solution

Q. Is profit commission common in non-proportional treaties?

View solution

Q. What is the difference between a profit commission on an "Accounting Year" basis and an "Underwriting Year" basis?

View solution

Q. What reserves are mentioned in the profit commission statement on an "Accounting Year" basis?

View solution
View All MCQs on IC85 Reinsurance Management

Recommended Subjects

Are you eager to expand your knowledge beyond IC85 Reinsurance Management? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Logical Reasoning

Enhance your logical thinking and decision-making abilities with our Logical...

Human and Cultural Diversity

Explore the rich tapestry of human societies with our Human and Cultural Diversity...

Basic Electrical Engineering

Master the fundamentals of Electrical Engineering with our specialized category....

Waste Water Engineering

Navigate the challenges of wastewater treatment and management with our Waste Water...

Basic Chemical Engineering

Get a solid foundation in Chemical Engineering with our Basic Chemical Engineering...

Textile Engineering

Explore the dynamic world of Textile Engineering with our specialized category. Delve...

IC38 Life Insurance Agent Exam

Prepare for success in the Insurance Institute of India (III) IC38 IRDA examination...

Enzyme Technology

Unlock the power of enzymes with our Enzyme Technology category. Explore enzyme...

Renewable Energy

Explore the sustainable future of energy with our Renewable Energy category. Dive...