Facultative reinsurance - Definition

In facultative reinsurance, the ceding company cedes and the reinsurer assumes all or part of the Risk assumed by a particular specified insurance policy. It is a type of reinsurance where the reinsurer has the right to Accept or reject each policy presented to him or her by the insurance company. Underwriting expenses and, in particular, personnel costs, are higher relative to premiums written on facultative business because each risk is individually underwritten and administered. The ability to separately evaluate each risk reinsured, however, increases the probability that the underwriter can price the contract to more accurately reflect the risks involved.

Terms near "Facultative reinsurance"

FAD multiple

Fail position

Fair market value

Fair market value lease

Fair price

Fair price provision

Fair rate of return

Fair rental value coverage

Fair tax

Fair trade