What Does Facultative Reinsurance Mean?

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What does Facultative Reinsurance mean? Read on to discover the definition & meaning of the term Facultative Reinsurance - to help you better understand the language used in insurance policies.

Facultative Reinsurance

Facultative Reinsurance

A form of reinsurance whereby each exposure the ceding company wishes to reinsure is offered to the reinsurer and is contained in a single transaction. The submission, acceptance, and resulting agreement is required on each individual risk that the ceding company seeks to reinsure. That is, the ceding company negotiates an individual reinsurance agreement for every policy it will reinsure. However, the reinsurer is not obliged to accept every or any submission.

We hope the you have a better understanding of the meaning of Facultative Reinsurance.

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