Facultative Reinsurance

Definition of "Facultative reinsurance"

Yolanda Burgess real estate agent

Written by

Yolanda Burgesselite badge icon

Platinum Partners Realty

Individual risk offered by an insurer for acceptance or rejection by a reinsurer. Both parties are free to act in their own best interests regardless of any prior contractual arrangements. With proportional facultative reinsurance, the reinsurer assumes a proportional share of premiums and losses. On a nonproportional basis, the reinsurer is liable only for losses which exceed the insurer's retention level; premiums vary with loss expectation.

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