Facultative
Facultative is a type of reinsurance arrangement where the primary insurance company has the option (or "faculty") to offer individual risks to a reinsurer, and the reinsurer can choose to accept or decline each risk separately. It's different from automatic reinsurance where risks are automatically covered. Think of it like having the ability to pick and choose which specific insurance policies to share with another insurance company, rather than sharing everything. This approach is typically used for unusual, large, or complex risks that don't fit within standard insurance agreements.
Examples in Resumes
Managed Facultative reinsurance placements for high-value commercial properties
Negotiated Facultative coverage terms with leading reinsurance markets
Analyzed and placed Facultative Reinsurance for risks exceeding treaty capacity
Typical job title: "Facultative Underwriters"
Also try searching for:
Where to Find Facultative Underwriters
Professional Organizations
Job Boards
Professional Networks
Example Interview Questions
Senior Level Questions
Q: How do you determine whether a risk should be placed facultatively versus retained within the treaty program?
Expected Answer: Should discuss evaluation of risk characteristics, treaty capacity limitations, exposure analysis, and market conditions that influence facultative placement decisions.
Q: Describe a challenging facultative placement you've handled and how you succeeded in placing it.
Expected Answer: Should demonstrate experience in complex risk assessment, negotiation skills, and market relationships, explaining how they overcame specific placement challenges.
Mid Level Questions
Q: What information do you need to gather for a facultative submission?
Expected Answer: Should mention risk details, loss history, exposure information, construction details for property risks, and any other relevant underwriting information needed for individual risk assessment.
Q: Explain the difference between facultative and treaty reinsurance.
Expected Answer: Should clearly explain that facultative covers individual risks on a case-by-case basis, while treaties automatically cover all risks that fall within agreed parameters.
Junior Level Questions
Q: What is facultative reinsurance and why is it used?
Expected Answer: Should explain that it's a type of reinsurance for individual risks that might be too large or complex for standard treaty coverage, with basic understanding of when it's needed.
Q: What are the basic components of a facultative certificate?
Expected Answer: Should identify key elements like insured name, risk location, limits, premium, and basic terms and conditions.
Experience Level Indicators
Junior (0-2 years)
- Basic understanding of insurance principles
- Ability to gather risk information
- Knowledge of policy forms
- Understanding of basic facultative concepts
Mid (2-5 years)
- Risk assessment and analysis
- Market relationship management
- Negotiation of terms and conditions
- Understanding of treaty relationships
Senior (5+ years)
- Complex risk evaluation
- Strategic placement decisions
- Market development
- Team leadership and mentoring
Red Flags to Watch For
- No understanding of basic insurance principles
- Lack of knowledge about reinsurance markets
- Poor communication skills
- No experience with risk assessment
Related Terms
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