Facultative reinsurance is coverage purchased by a primary insurer to cover a single risk or a block of risks held in the primary insurer’s book of business. Facultative reinsurance is one of the two types of reinsurance, with the other type being treaty reinsurance. Facultative reinsurance is considered to be more of a one-off transactional deal, while treaty reinsurance is more of a long-term arrangement.
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