Question

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

a.

It allows for easier administrative work and is cost-effective

b.

It ensures the continuation of the existing reinsurers on the treaty

c.

It leads to a greater multiplicity of accounts for open years

d.

It reduces the number of accounts required for open years

Answer: (a).It allows for easier administrative work and is cost-effective Explanation:The portfolio transfer or clean cut method is preferred because it allows for easier administrative work and is cost-effective compared to the natural expiry method, which leads to a tremendous multiplicity of accounts for open years.

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

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