Q. What happens to the result of the previous year's statement if it is a loss?

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Q. In which scenario is no profit commission paid in the current year?

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Q. What is the recommended practice for maintaining a breakdown of results for a loss carried forward for a limited period?

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Q. How are the results calculated for treaties on a three-year average basis?

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Q. When is a final profit commission statement rendered for a cancelled treaty?

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Q. What constitutes the result of the third year in the calculation for a three-year average when a treaty is cancelled?

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Q. What is the purpose of retaining a proportion of the ceded premium by the ceding insurer?

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Q. What factors are typically agreed upon in relation to reserves in proportional treaties?

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Q. What is the purpose of adjusting the loss reserve at anniversary dates or in quarterly accounts?

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Q. How are settled claims typically handled in relation to the loss reserve?

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Q. What is the purpose of establishing a loss reserve at a fixed rate of 100 or 90% of the outstanding losses?

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Q. What does the ceding insurer do in relation to the reinsurer assuming liability for risks current at the commencement of the reinsurance agreement?

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Q. How are the reinsurer's liabilities for outstanding losses determined in relation to the commencement date of reinsurance?

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Q. What happens if the actual payments for outstanding losses differ from the amount credited to the reinsurer at the commencement of reinsurance?

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Q. What is the alternative method to allowing the cessions to run to their natural expiry in the event of treaty cancellation?

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Q. Why is the portfolio transfer or clean cut method preferred over the natural expiry method?

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Q. What is the portfolio transfer method used for in reinsurance?

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Q. Why is the portfolio transfer method not always used for valuing portfolios?

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Q. What percentage of the premiums of the previous year is typically used for portfolio transfer in surplus and quota share treaties?

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Q. How is the portfolio transfer percentage of 35% to 40% determined using the "50% Method"?

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