What is Reinsurance?
Reinsurance is a form of insurance. A reinsurancecontract is legally an insurance contract.
agrees to indemnify the
insurer for a specified share of specified types of insurance claimspaid by the cedant for a single insurance policy or for aspecified set of policies.
The terminology used is that the reinsurer
, or share of claims to be paid by thereinsurer, may be defined on a
basis(a specified percentage of each claim) or on an
(the part of each claim, or aggregation of claims,above some specified dollar amount).