Definition of quota share reinsurance

automatic reinsurance that requires the insurer to transfer, and the reinsurer to accept, a given percentage of every risk within a defined category of business written by the insurer. For example, in the case of a 20% quota share, the insurer transfers 20% of its liability and premiums on every risk to the reinsurer, who must pay 20% of any loss sustained, whether total or partial. The percentage is constant throughout and applies to premiums and losses alike.