A clause in a reinsurance or other agreement that specifies that deficits shall be carried forward and offset in arriving at any profit commission due to the reinsured. Deficits may be carried forward to extinction or for a limited period, e.g. three or five years.
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A condition in a treaty which requires that a deficit at the end of one Underwriting year be carried forward into the account for the next year, when determining the overall profit in a profit commission statement.