A priority cession is Reinsurance which is ceded before Ceding to the Company’s normal treaties.

A generic term describing all forms of reinsurance in which the reinsurer shares a pro-rata portion of the losses and premiums of the ceding company. Also called Share and Participating Reinsurance. Pro rata Reinsurance includes Quota Share Reinsurance and Surplus Reinsurance.
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See: “Reinsurance, Pro-rata.”

An additional commission payable by the Reinsurers to the Ceding Company as a percentage of profits derived from the business. It is a pre-determined percentage of the reinsurer’s net profits after a charge for the reinsurer’s overhead, derived from the subject treaty.Overriding Commission : Commission payable in addition to the original commission particularly under retrocession treaties.Sliding Scale Commission : A ceding commission which varies inversely with the loss ratio under the reinsurance agreement, the scales are not always one to one; for example, as the loss ratio decreases by 1%, the ceding commission might increase only 5%.Super Profit Commission : Overriding profit commission payable in addition to the original profit commission particularly under retrocession and/or reciprocal treaties.Reinsurance, Commission Reinsurance Intermediary : (a) Agent’s commission: A percentage of premium paid to an agent for insurance placement services (b) Brokerage: A percentage or a fee paid to a broker for insurance or reinsurance placement services.

As a pricing factor (along with expenses and losses) the return the reinsurer expects from the degree of net risk taken. As with any investment, the reinsurer expects a larger return from risky than safe investments.

Pro-rata or Risk Sharing Treaty : Which provide for sharing of risk between the Ceding Company and the Reinsurer, on lines similar to those under the facultative method.

Tentative amounts applicable to either rate, premium or commission set at the start of the contract and subject to subsequent adjustment.

(i) The ratio of reinsurance losses incurred to the ceding company’s subject premium. (ii) The ratio of the reinsurance losses incurred and allocated, less expense to the ceding company’s gross earned premium.
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See: “Reinsurance, Pure Loss Cost Ratio.”

A form of pro rata reinsurance (or proportional reinsurance) indemnifying the ceding company for an established percentage of loss on each risk covered in the contract in consideration of the same percentage of the premium paid to the ceding company. This may also be known as “first dollar ground up” reinsurance although it can be used for “Excess” original business such as original Umbrella or Excess policies.
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A type of pro rata or proportional reinsurance agreement under which the insurer and reinsurer agree to share a predetermined portion of all insurance, premium, and losses. The primary insurer’s retention in a quota share agreement is expressed as a percentage of the amount insured.

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.