Reinsurance contract with ‘original loss warranty’ clause
Entity A agrees to provide reinsurance cover to airline insurer B for $1m against losses suffered. The claims are subject to an original loss warranty of $50m meaning that only losses suffered by B up to $1m from events exceeding a cost of $50m in total can be recovered under the contract. This is an insurance contract as B can only recover its own losses arising from those events.
If the contract allowed B to claim up to $1m every time there was an event with a cost exceeding $50m regardless of whether B had suffered a loss from that event then this would not be an insurance contract because there would be no insurable interest in this arrangement.