When premium income less return premiums arising from policies issued or other contracts entered into to reinsure other insurance entities that provide the related primary coverage are called:
Click on the arrows to vote for the correct answer
A. B. C. D.C
The correct answer to this question is C. Assumed reinsurance premiums.
Reinsurance is a practice in which an insurance company (the reinsurer) assumes all or part of the risk associated with policies issued by another insurance company (the cedent). The cedent pays a premium to the reinsurer in exchange for assuming this risk. The reinsurer collects premiums from the cedent based on the policies or contracts that it has agreed to reinsure.
Premium income less return premiums arising from policies issued or contracts entered into to reinsure other insurance entities that provide the related primary coverage is known as "assumed reinsurance premiums." This is because the reinsurer is assuming the risk associated with policies or contracts issued by another insurer.
Option A, "indirect premiums," is an incorrect answer. Indirect premiums are premiums paid by policyholders to an insurer through an intermediary, such as an insurance broker or agent.
Option B, "direct premiums," is also an incorrect answer. Direct premiums are premiums paid by policyholders to an insurer for the insurance coverage they receive.
Option D, "real reinsurance premiums," is also an incorrect answer. This term is not commonly used in the insurance industry to refer to assumed reinsurance premiums.