The gross WRITTEN PREMIUM income of the reinsured (less return premiums) after deduction of original commissions or reinsurances or both of these.

A clause which allows the reinsured to effect other REINSURANCES IN PRIORITY so that the treaty protects the net account only, e.g. where the treaty operates after proportional treaty or facultative cessions. The INSOLVENCY OF OTHER REINSURERS Clause usually forms a paragraph hereof. The Net Retained Lines Clause will normally be omitted where the treaty covers the reinsured’s gross account or where the cover operates for COMMON ACCOUNT.

Failure by the insured, reinsured or broker to tell the underwriter about a material circumstance affecting the risk he is being asked to write. A breach of utmost good faith.

A term used to refer to the EXCESS OF LOSS and STOP LOSS forms of reinsurance (where premiums and claims are not proportionate to those of the original risks) as distinct from the PROPORTIONAL forms.

Usually proportional treaties are for an unlimited period, i.e. they continue for as long as both parties agree to maintain the contracts in force. However, either party may decide to cancel the treaty and this must be done at a specified date (for example, the anniversary date of 31st December for treaties incepting at 1st January) by giving notice to the other party of its intention to cancel, usually 3 months in advance.

A term which is added to the reinsurer’s acceptance on a SLIP that offers a reinsurance on a continuous basis (see CONTINUOUS TREATIES) to provide the reinsurer with an agreed automatic expiry at anniversary. This helps the reinsurer to avoid any problem which might arise should it forget to give notice of termination according to the terms of the reinsurance. This cannot be used on a treaty or facultative risk issued for a fixed period that is greater than one year.