A contract formalizing a reinsurance cession on a specific risk.
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See: “Reinsurance, Facultative Certificate of Reinsurance “

The Ceding Company is not bound’ to automatically cede to the treaty but has the right of making cessions, where it chooses to do so. the Reinsurer, for his part undertakes to accept all the cessions, within the limits of a certain number of lines and/or a maximum amo unt.

A reinsurance contract under which the ceding company can select and the reinsurer is obligated to accept cessions of risks of a defined class, provided the risks fall within the contract guidelines.

Reinsurance by offer and acceptance of individual risks, wherein the reinsurance retains the “faculty” to accept and reject each risk offered by the ceding.

A contract setting out how facultative reinsurance shall be handled by an insurer and a reinsurer.
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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.