Question

What are the "eighth," "twelfth," and "twenty-fourth" systems used for in the calculation of portfolio premium?

a.

Calculating the reinsurance commission for the renewing reinsurer

b.

Adjusting the portfolio transfer based on alterations in the business composition

c.

Estimating the unexpired portions of each month's business at the end of the year

d.

Dividing the premiums into equal parts based on the number of reinsurers

Posted under IC85 Reinsurance Management

Answer: (c).Estimating the unexpired portions of each month's business at the end of the year Explanation:The "eighth," "twelfth," and "twenty-fourth" systems are used to calculate the unexpired portions of each month's business at the end of the year, considering the assumption that the majority of each month's premiums will usually expire in the middle of the month.

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Q. What are the "eighth," "twelfth," and "twenty-fourth" systems used for in the calculation of portfolio premium?
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