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.

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