reinsurance premium

  • That premium paid by the ceding company to the reinsurer in consideration for liability assumed by the reinsurer. On a pro rata type of treaty, said premium is a pro rata share of the ceding company’s gross premium less a ceding commission. On excess of loss treaties, the premium is a percentage of the ceding company’s gross net premium income for the class of business being reinsured. It is usually calculated annually, and is not subject to a ceding commission.

    Internal Revenue Service 1

1Internal Revenue Service, Internal Revenue Manual 4.42.6 Glossary, http://­www.irs.gov/­irm/­part4/­irm_04-042-006.html (last accessed Dec. 22, 2009).