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Setoff

Setoff

Definition

Setoff — in reinsurance, a setoff or offset is an equitable right that allows parties to cancel or offset mutual debts to each other by asserting the amounts owed, subtracting one from the other, and paying only the balance. The right of setoff is readily available in insurance and reinsurance relationships, and, like all rights, it should be carefully planned for and built into the contractual relationship's terms.

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