Reinsurance Practice and the Law
Chapter 1
INTRODUCTION TO AND OVERVIEW OF REINSURANCE*
INTRODUCTION
1.1
Reinsurance has been described as “insurance between consenting adults”. To anyone not involved in the industry, reinsurance is generally an obscure concept. An individual pays an insurance premium to an insurance company and that’s an end to the matter unless and until a claim is made under the policy. So why does an insurance company need insurance? In fact, it is the role of reinsurance in enabling primary insurers to spread their risk which helps to ensure the insurers are still around when claims are made.