Question

A ____________ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature.

Answer 1

Facultative

Step-by-step explanation:

Facultative reinsurance is a type of coverage which covers a single risk or a block of risks held in the book of business of the insurer who has purchased the cover.

It allows the company which reinsurance to review individual risks which helps in determining whether to accept or reject them

The Facultative reinsurance is more focused in nature.