Multiple choice

In reinsurance, commission paid to the ceding company which is more than the acquisition cost to allow for additional expenses is known as:-

  1. Overriding commission

  2. Reinstatement commission

  3. Occurrence commision

  4. Underwriting commission
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A Correct answer
Explanation

Overriding commission:- In insurance, a commission paid by an insurer to an agent or managing general agent for premium volume produced by other agents in a given geographic territory. In reinsurance, it is the commission paid to an intermediary in return for placing a retrocession of reinsurance.

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