1. The purchase
by a reinsurance company
. This limits the risk
that a reinsurance company must face, since it has purchased insurance against
an event that might affect
a company that it had underwritten. If a reinsurance company continues to purchase insurance it might unknowingly buy back
its own risk, known as "spiraling".
2. The voluntary act of returning property
which had been previously "ceded" to its original holders
. Examples include
Washington, D.C. returning land
to the state of Virginia in 1847, or the United Kingdom returning Hong Kong to China in 1997.