The willingness of an insurance company to offer civil protection is often determined by the availability of reinsurance. When disaster bonds were first issued after Hurricane Andrew, they should be accepted across the sector as an alternative to the then-rare traditional reinsurer, but still constitute a small, albeit growing, part of the global disaster reinsurance market. In the case of optional reinsurance, the reinsurer must cushion the individual “risk” such as a hospital, as a primary company would do when it reviews and records all aspects of the operation and the hospital shutdown for safety. In addition, the reinsurer would consider the hiring and management of the non-reinsurer insurer to protect reinsurance. This type of reinsurance is called optional because the reinsurer has the power or “ability” to accept or refuse in whole or in part any policy proposed to him, as opposed to the contractual reinsurance according to which he must accept all applicable policies as soon as the contract is signed. There are two main types of contractual reinsurance, proportionally and not proportionately, which are listed below. In the case of proportional reinsurance, the reinsurer`s share of risk is defined for each policy, while for non-proportional reinsurance, the reinsurer`s liability is based on the total claims of reinsurers. Over the past 30 years, reassurance proportional to non-proportional reinsurance in the property and accident sector has shifted significantly. The reinsurer`s liability generally covers the entire life of the original insurance once it is written. However, the question arises as to when one of the parties will be able to cease reinsurance for future new transactions.

Reinsurance contracts can be written either on an ongoing or “term” basis. A permanent contract does not have a predetermined deadline, but as a general rule, each party can terminate 90 days or change the contract for new transactions. A due agreement has an integrated expiry date. It is customary for insurers and reinsurers to maintain long-term relationships that span many years. Reinsurance contracts are generally longer documents than discretionary certificates, which contain many of their own conditions, which differ from the conditions of the direct insurance policies they reinsure. However, even most reinsurance contracts are relatively short documents, given the number and diversity of risks and divisions that re-insure contracts and transaction dollars.