Participation on the part of the reinsurer in a particular individual risk assumed by the direct insurer. This is in contrast to obligatory reinsurance (also: treaty reinsurance).

Fair value

Price at which a financial instrument would be freely traded between two parties.

Financial Accounting Standards (FAS)

cf. Statement of Financial Accounting Standards (SFAS)

Financial Solutions

Refers to reinsurance transactions which – in addition to the transfer of biometric risks – also include financing components. They generally employ the future profits contained in a block of new or inforce business to enable a ceding company to achieve a desired financial objective. Such reinsurance solutions provide direct insurers with an alternative means of accessing capital in order, for example, to pursue new lines of business or increase capital reserves.

Funds held by ceding companies/funds held under reinsurance treaties

cf. Deposits with ceding companies / deposits received from retrocessionaires