In the case of non-proportional reinsurance, the reinsurer only pays if the total amount of damage suffered by the insurer during a given period exceeds a declared amount, called a “deductible” or “priority”. For example, the insurer may be willing to accept a total loss of up to $1 million and buy a $4 million reinsurance layer that exceeds that $1 million. If a loss of $US 3 million were then to occur, the insurer would bear $US 1 million of the loss and recover $US 2 million from its reinsurer. In this example, the insurer also retains excess losses of more than $US 5 million, unless it has acquired another layer of excess reinsurance. Sometimes insurance companies want to offer insurance in jurisdictions where they are not licensed or where they feel the local rules are too burdensome: for example, an insurer wants to offer a multinational an insurance program to cover property and liability risks in many countries around the world. In such situations, the insurance company may find a licensed local insurance company in the relevant country, have the local insurer issue an insurance policy covering the risks in that country and enter into a reinsurance contract with the local insurer to transfer the risks to itself. In the event of a claim, the policyholder would assert claims against the local insurer under the local insurance policy, the local insurer would pay the fee and demand reimbursement under the reinsurance contract. Such a provision is called “fronting”.