Meaning of the term "Commission on re-insurance ceded /accepted" in Insurance

Commission on re-insurance ceded /accepted :-

Insurance companies get business through its agents. Such agents receive the commission on the basis of the amount of business they generate for the company. When the company gets re-insurance business it has to pay commission to the Ceding company also. This commission paid by the reinsurance company is called ‘commission on re-insurance accepted’ and is shown as an expense in the revenue account of the reinsurance company. For the ceding company, when it passes on a part of the business to the reinsurance company then the Ceding company gets its commission from the reinsurance company. This commission is called ‘commission on re-insurance ceded’. It is a gain to the company surrendering the business. It appears on the credit side of revenue account.