Reinsurance by offer and acceptance of individual risks, wherein the reinsurance retains the “faculty” to accept and reject each risk offered by the ceding.
Insurance Encyclopedia
Facultative reinsurance
A separate reinsurance agreement that is negotiated for a particular risk or insurance policy. The cedant has the option (faculty) of submitting and the reinsurer has the option of accepting or declining individual risks.
***
REINSURANCE: Reinsurance of individual risks by offer and acceptance wherein the reinsurer retains the ability to accept or reject and individually price each risk offered by the ceding company.
***
UK: Reinsurance on an individual risk basis; the cedant offers the reinsurance to a reinsurer who may accept or decline as he is not bound by a treaty. See FACULTATIVE OBLIGATORY TREATY.
***
UK: the reinsurance of risks on an individual basis (contrast treaty reinsurance).
***
MEDICAL,USA: Type of reinsurance of an individual risk at the option (the “faculty” either to accept or reject) of the insurance company requiring reinsurance.
Facultative reinsurance (Reinsurance)
Reinsurance in which the reinsurer has the right to accept or reject each policy presented to him or her by the insurance company.
Facultative risk
A reinsurance risk that is placed by means of separately negotiated contract as opposed to one that is ceded under a reinsurance treaty.
Facultative Treaty
A contract setting out how facultative reinsurance shall be handled by an insurer and a reinsurer.
***
A reinsurance contract under which the ceding company has the option to cede and the reinsurer has the option to accept or decline individual risks. The contract merely reflects how individual facultative reinsurances shall be handled.
Facultative-Obligatory Reinsurance
See: “Reinsurance, Facultative Obligatory.”
Facultative/obligatory treaty
A reinsurance contract which allows the reassured to select which risks of a given type are to be ceded to the reinsurer. The reinsurer is obliged to accept all the cessions made by the reassured provided they fall within the scope of the treaty.
Faculty of Actuaries
Professional body representing actuaries in Scotland. See INSTITUTE OF ACTUARIES.
faculty practice plan (FPP)
Policies and procedures in a document that state the manner in which patient services are delivered by a teaching program or medical school faculty physicians, the method of obtaining payment, and the disposition of the funds obtained for the services. Also known as clinical practice plan and medical practice plan .
Failed well Insurance
Insurance Policy that cover risk of failure of well which includes shallow tube wells, dug-wells, filter points, bore wells etc., used for developing ground water. The well shall be deemed to have failed completely if it fulfills conditions as mentioned in the policy and the indemnity will include the expenditure actually incurred by farmers toward boring/digging of the well, net of margin money and/or subsidy received subject to 80% of the amount of admissible claim. Policy does not cover quality of water and structural failure, flood, earthquake and other convulsions of nature, riot and strike risks.