23.1 Introduction

A reinsurance contract is a contract under which an insurer transfers a portion of its written insurance business to another insurer (or insurers) by way of cession; the transaction is reinsurance.1 Reinsurance is a means whereby the original insurer can spread the risks covered among other insurers both national and international, thereby reducing his own exposure and losses on business written. The concept of reinsurance plays an essential role in the insurance industry, is used in every class of insurance business and operates across national boundaries.2