Facultative reinsurance involves separate consideration of an individual risk or defined exposure.
The distinction that matters
It differs from automatic treaty acceptance and may have terms that do not exactly match the original insurance policy.
What to check
- Confirm the accepted risk and signed share.
- Compare original and reinsurance wording.
- Check notification and claims provisions.
Example to discuss
An insurer placing a complex factory risk checks that the facultative placement addresses the same declared processes as the original policy.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Jurisdiction and scope
This is an insurer-to-reinsurer concept. A retail customer should check the original policy and insurer rather than infer a direct claim entitlement from a reinsurance structure. Reporting definitions and contract terms may differ.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.