The Ceding Company binds herself to retain for own account a fixed proportion of all its business in a class, up to a limit, and cede a fixed proportion of all business up to an agreed amount to the Reinsurer, and give the corresponding proportion of the premium income.
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A reinsurance treaty which provides that the reassured shall cede to the reinsurer a specified percentage of all the premiums that it receives in respect of a given section or all of its underwriting account for a given period in return for which the reinsurer is obliged to pay the same percentage of any claims and specified expenses arising on the reinsured account.