Occurs where the terms and conditions of a primary insurance policy match those of its counterpart reinsurance policy. There is a presumption that facultative reinsurance is back-to-back with the original insurance (Vesta v. Butchers and Others). It is also presumed that proportional reinsurances are back-to-back with the insurance policies, but this is not true of excess of loss treaties. Where by express terms the risk presented to the reinsurer is materially different from that assumed by the reinsured, there is no presumption of back-to-back cover (Gan Insurance and Another v. Tai Ping).