A reinsurance treaty is the contract that sets up treaty reinsurance: a standing agreement under which an insurer cedes, and a reinsurer accepts, every risk that falls within a defined class of business for a set period, usually one year. The main entry explains how this form of reinsurance works and how it compares with other forms.
The two terms describe the same arrangement from different angles. "Treaty reinsurance" names the method, in contrast to facultative reinsurance, where each risk is negotiated separately. "Reinsurance treaty" names the document itself, with its wording on the business covered, the insurer's retention, limits, exclusions, premium or commission terms, reporting duties and how disputes are settled.
A treaty may be proportional, such as quota share reinsurance, or non-proportional, such as excess of loss reinsurance. Each individual transfer of risk made under it is a reinsurance cession. Insurers typically hold a programme of several treaties that are renewed at fixed dates each year.