New Enroll in our GIC Finance Online Course Here!

    Register

    Question

    In which of the following arrangement, a commission is

    earned by many intermediaries through reinsurance agreements?
    A Commission churning Correct Answer Incorrect Answer
    B Fee churning Correct Answer Incorrect Answer
    C Money churning Correct Answer Incorrect Answer
    D All of the above Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    In fee churning, a series of intermediaries take commissions through reinsurance agreements.  The initial premium is reduced by repeated commissions until there is no longer money to pay claims. The company left to pay the claims is often a business the conspirators have set up to fail.

    Practice Next