What is Facultative Reinsurance . When you need to use facultative reinsurance placing?

Facultative Reinsurance :-

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        Facultative means optional , the power to act according to the free choice.Facultative reinsurance is effected to cover individuals acceptances.Thus facultative underwriter is free to accept or decline each offer and the insurer is not compelled to cede.

       Facultative reinsurance can be on a proportional or non-proportional basis.The proportional form is the original.

Uses :-

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    1) Beyond automatic treaty capacity.

    2) Where no treaty protection is available.

    3) Where the insurer does not wish to cede to the treaty.

    4) Hazardous or market target risks.

    5) Unique , commercial ,financial or strategic reasons.

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