Question

What is the portfolio transfer method used for in reinsurance?

a.

Calculating the pro-rata premium for each cession

b.

Determining the gross portfolio to be withdrawn by the ceding insurer

c.

Estimating the reinsurance commission for the renewing reinsurer

d.

Valuing the unexpired portion of each cession separately

Answer: (b).Determining the gross portfolio to be withdrawn by the ceding insurer Explanation:The portfolio transfer method is used to determine the gross portfolio to be withdrawn by the ceding insurer from his current reinsurer, subject to deduction of reinsurance commission, and transferred to the renewing reinsurer.

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

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