Proportional treaty that allocates risk, losses and premium on a variable-percentage basis between the cedant and reinsurer. The cedant’s retention is a fixed monetary amount for each policy but the percentage reduces as the policy limit increases. Where the retention, called a line, is not exceeded, 100 per cent of the risk is retained by the cedant. The treaty capacity is expressed as a multiple of the cedant’s line; a retention of £3m plus a four line treaty (£12m) means that the cedant is able to accept up £15m without recourse to further reinsurance facultatively or by a second surplus treaty. See Figure 8.