A contract of reinsurance that is confined to business produced by a named agent of the insurer generated by that agent and administered directly with the reinsurer as allowed by the insurer. While there are other reasons for such practice, the facility allows an agent to issue larger policies that his insurer would otherwise restrict. Usually, agency reinsurance is written on pro-rata basis for property or other first party insurances.

A form of excess of loss reinsurance which, subject to a specified limit, indemnifies the ceding company for the amount by which all of the ceding company’s losses (either incurred or paid) during a specific period (usually 12 months) exceed either 1) a predetermined dollar amount or 2) a percentage of the ceding company’s subject premiums earned (loss ratio) for the specific period.