01.Core Concepts

There are two principal forms of reinsurance: Facultative reinsurance is an optional, case-by-case method that is used when the ceding company receives an application for insurance that exceeds its retention limit Often used when the primary insurer has an application for a large amount of insurance Treaty reinsurance means the primary insurer has agreed to cede insurance to the reinsurer, and the reinsurer has agreed to accept the business All business that falls within the scope of the agreement is automatically reinsured according to the terms of the treaty