What is the term for when a ceding insurer transfers risk to an assuming insurer on a case-by-case basis?

The correct term for when a ceding insurer transfers risk to an assuming insurer on a case-by-case basis is facultative reinsurance. This type of reinsurance arrangement allows the ceding insurer to evaluate and choose each individual risk it wants to cede to the reinsurer. The reinsurer can also assess the specific risks before agreeing to accept them. This flexibility is particularly beneficial when the risks are unique or varying in nature, allowing for more tailored risk management strategies.

In contrast, other options such as mandatory reinsurance involve pre-established agreements where certain risks must be ceded, while automatic reinsurance refers to a setup where risks are automatically accepted without individual evaluation. Ad-hoc reinsurance is not a commonly used industry term and might suggest a more informal agreement on a temporary basis, but it does not specifically capture the defined and structured nature of facultative reinsurance as a case-by-case transfer.