Facultative reinsurance is:

Question

Quizplus · Accepted Answer

Facultative reinsurance is arranged separately for each new exposure, meaning it is not automatic on a treaty basis. It is typically requested by the ceding insurer on a case-by-case basis, and its terms are negotiated based on the characteristics of each individual risk being transferred. The other choices are incorrect: A is not true because facultative reinsurance is not automatic, as mentioned above; B is not true because facultative reinsurance can be revocable or irrevocable, depending on the terms negotiated between the cedent and reinsurer; and D is not necessarily true, as facultative reinsurance can be placed with domestic or foreign insurers depending on the needs of the cedent.

Facultative Reinsurance Is