The netting of amounts due between two parties as provided for by common law, contract law, statutory law, regulatory law and/or judicial law. Some reinsurance contracts contain a mutual right of offset, while others may operate only for one party’s benefit or remain silent. Offset may be allowed under all contracts between the parties or only under that specific contract. State insurance rules may address offset in insolvency.

A provision in reinsurance agreements which permits each party to net amount due against those payable before making payment ; especially important in the event of insolvency of one party which ceases to remit amounts due to the other.
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Agreement between the reinsured and the reinsurer that debits and credits between them may be set off against each other with payment only of the balance. Premiums due to the reinsurer may be set off against claims payments due to the reinsured. Offsetting becomes important if one of the parties becomes insolvent.

The Office of Financial Research, created by the Dodd-Frank Act, is tasked with supporting the efforts of the FSOC in monitoring systemic risk, collecting and assessing data, performing applied research on these issues and developing tools for risk measurement and monitoring.