Which of the following terms is used to describe the insurance passed to the reinsurer?

The term used to describe the insurance passed to the reinsurer is "cession." In the context of reinsurance, a cession refers to the portion of risk transferred from the primary insurer (the ceding insurer) to the reinsurer. This mechanism allows insurers to manage risk more effectively by sharing it with another entity, thus providing them with additional security and the ability to underwrite larger policies than they might be able to handle on their own.

Understanding the role of cessions in the reinsurance process is crucial for surplus lines brokers, as these professionals must navigate the complexities of risk transfer while ensuring compliance with regulatory requirements. The other terms listed do not correctly define this specific transaction. For instance, a "policy" refers to the contract of insurance itself, while "indemnity" relates to compensation for loss or damage. "Coverage" describes the specific protections offered by an insurance policy, but it does not encompass the transfer of risk that is identified by the term "cession."