In addition, Mr. Foley said that Metropolitan Life had already bought reinsurance to cover the cost of the settlement.

Most insurance companies still lay off risk by buying traditional reinsurance, which is cheaper and can be arranged on shorter notice than a bond issue.

(Insurers buy reinsurance to spread out the risk of loss.)

The state-owned insurance company has, for the first time, bought reinsurance against major losses from natural disasters like earthquakes and floods from a foreign insurance group.

Insurance companies buy reinsurance to offload some of their risk.

As a result, it will be cheaper for insurance companies to issue catastrophe bonds than to buy comparable reinsurance, according to a Lehman report.

The reinsurance company that buys reinsurance is the "retrocedant".

Companies buying financial reinsurance, investigators say, sometimes improperly reported the transactions in order to inflate their financial results.

As is the case with most big insurers, A.I.G. buys reinsurance from other companies to shed some of the risks associated with the insurance it has written.

Insurers buy reinsurance to limit their own exposure to large claims.