“Quota Share Reinsurance”
A form of reinsurance whereby the reinsurer accepts a stated percentage of each and every risk underwritten by the reinsured company within a defined category of business and within the underlying insurance contract parameters on a pro rata basis and is usually paid a pro rata portion of the applicable premium after agreed deductions. Quota Share Reinsurance can be contrasted with Excess of Loss Reinsurance, which generally provides reinsurance coverage only once a specified limit or retention has been exceeded and then usually only for a specified portion of the excess.
