Question

In which of the following reinsurance commission methods will the commission payable be determined by applying the agreed percentage of commission to the premiums ceded less returns and cancellation?

a.

Flat rate of commission

b.

Sliding Scale of commission

c.

Overriding commission

d.

Profit commission

Answer: (a).Flat rate of commission Explanation:In the flat rate of commission method, the commission payable is determined by applying the agreed percentage of commission to the premiums ceded (i.e., the premiums transferred to the reinsurer) less returns and cancellations. This means that the commission is calculated based on the net premiums ceded after deducting any returns or cancellations. It is a straightforward method where the commission remains constant regardless of the performance or profitability of the business.

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Q. In which of the following reinsurance commission methods will the commission payable be determined by applying the agreed percentage of commission to the premiums ceded less...

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