REINSURANCE: A reinsurance treaty under which the rate of premium is fixed at the outset as a percentage of the ceding insurer’s premium income less premiums paid for reinsurance effected in priority to reinsurance under the treaty.
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UK: Excess of loss reinsurance treaty under which a flat rate is agreed. The rate is applied to the cedant’s original gross premium income less only reinsurances paid out by the company which operate in priority to and for the benefit of the excess of loss treaty. The burning cost method is used to calculate the rate. Compare with sliding scale treaty.
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UK: Means quota share treaty.
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REINSURANCE: The Reinsurers agree to accept automatically a fixed proportion of all Insurances of a defined type, say one-half of all fidelity guarantee Insurances accepted by the Direct Insurers.