Question

How is the unexpired exposure of each month's premium calculated?

a.

By dividing the premium into equal parts based on the number of reinsurers

b.

By deducting the reinsurance commission from the total premium

c.

By multiplying the premium by the number of unexpired months

d.

By summing up the proportions of unexpired exposure for each month

Answer: (d).By summing up the proportions of unexpired exposure for each month Explanation:The unexpired exposure of each month's premium is calculated by summing up the proportions of unexpired exposure for each month based on the assumption of when the majority of each month's premiums will usually expire.

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Q. How is the unexpired exposure of each month's premium calculated?

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