The question concerns reinsurance premiums, but the answer seems to revolve reinsurance commission. Is this is an error in the flashcard, or am I missing something?
Under an original terms contract, reinsurance premiums paid are just a proportion of the premiums received from the policyholder. As this is more than the reinsurer needs to cover the risk element of the contract, it pays reinsurance commission to the insurer (like a negative reinsurance premium) which is what is described here. The question should perhaps ask about "payments made by the insurer and reinsurer under original terms reinsurance".
