Question

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

a.

Credit the reinsurer with a percentage of the premiums without deduction of commission

b.

Deduct a percentage of the premiums as commission before crediting the reinsurer

c.

Pay the reinsurer a fixed amount for assuming liability

d.

Waive the requirement for the reinsurer to assume liability for risks

Posted under IC85 Reinsurance Management

Answer: (a).Credit the reinsurer with a percentage of the premiums without deduction of commission Explanation:The ceding insurer credits the reinsurer with an amount equal to a percentage agreed upon of the premiums, without deduction of commission, as accounted in the four quarterly statements immediately preceding the commencement date of reinsurance.

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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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