reinsurance

Basically, facultative reinsurance is the reinsurance of a single or a package of risks. the package of risks must be defined. It is done to reinsure the risks or the block of risks that are held by the primary insurer's books of business. The company buying facultative insurance from  the other company (also known as the ceding company) does that in order to pass some of their risks in exchange for a fee. Hope it helps :)