A reinsurance policy that provides an insurer with coverage for specific individual risks that are unusual or so large that they aren't covered in the insurance company's reinsurance treaties. This can include policies for jumbo jets or oil rigs. Reinsurers have no obligation to take on facultative reinsurance, but can assess each risk individually. By contrast, under treaty reinsurance, the reinsurer agrees to assume a certain percentage of entire classes of business, such as various kinds of auto, up to preset limits.

"Facultative Reinsurance" In Context

"Barents Re is one of Latin America's largest reinsurers, focusing mainly on facultative reinsurance for mass market insurance products, surety bonds and financial risks. The reinsurer's parent is holding company Standard Capital, which is based in the ..."