There are several types of reinsurance, which can be classified, mainly, into 2 groups: according to the contracting method or depending on the content of the assignments.
Reinsurance according to the type of contract:
• Mandatory reinsurance : in this type of contract the insurer undertakes to deliver to the reinsurer all the policies that cover certain risks while the latter undertakes to accept them. The conditions agreed in the contract by both parties (insurer and reinsurer) must be met.
• Optional reinsurance : neither the insurer nor the reinsurer have the obligation to assign or accept, respectively, the risks. Each of them is negotiated individually and independently, setting the conditions for each of the cases.
• Reassurance semifacultativo: is a form mixed . The reinsurer has the obligation to accept the risks assigned by the insurer, provided that the requirements established in the guarantee letter are complied with, although the latter is not obliged to transfer them.
Reinsurance according to the content of assignments:
• Part-share reinsurance : the insurer transfers to the reinsurer a proportional part of the capital insured in a particular modality or branch.
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• Surplus reinsurance : the insured capital of each one of the policies is transferred but that exceeds a certain amount that has been previously established, which is called full conversion . The reinsurer participates in a variable proportion.
Reinsurance of excess claims: the insurer establishes what maximum percentage of global claims will cover in a certain branch or modality while the reinsurer will face the excess.