What you've noted does exist, but the second line is more like building a 'tower' which is still in the primary layer. There's quite a bit of diversity in the reinsurance market so you're right about certain types, usually purchased by small businesses with large vehicles (cement mixers) who can't get enough in the primary.

But, in insurance companies buying insurance, there's some differences.

I'm not licensed but I do know the "Quota Share" structure is quite industry accepted for a few different lines (property being one, casualty, auto). So the % of risk retained versus ceded at various points to reinsurers is exactly the contract structure. Within that structure there are some limits and retentions that get hammered out during the contract and negotations ($XXX,XXX per occurrence of X, Y, Z, etc). But the point of this is that yes a company can retain XX% and reinsurers, usually several, split up dibs on the other XX%, sometimes in layers as well.

It's pretty interesting stuff and the numbers of what's out in the markets for underwriting is definitely an eye opener.