OBLIGATORY REINSURANCE – one of organization forms of reinsurance protection for an insurance company, by which an insurer (reinsurer) undertakes to forward a certain part (expressed either in percentage ratio or absolute value) of risks to reinsurance, and a reinsurer undertakes to accept his part of risks subject to previously specified and stipulated conditions.
OPEN COVER – form of automatic insurance of cargo for a long period without setting any general limits. Under the open cover an insured has to declare shipments on a case-by-case basis. Open cover is issued for a determined period and stays “always open”.
OVERRIDING COMMISSION – a part of a premium, retained by an assigning company for its benefit when assigning a risk to reinsurance. Can be calculated both from gross and net premium.