Which of the following is NOT a type of reinsurance?

Reinsurance is a critical mechanism in the insurance industry that allows insurance companies to manage risk by transferring portions of their risk portfolios to other parties. The various types of reinsurance practices include treaty reinsurance and facultative reinsurance.

Treaty reinsurance involves a standing agreement between the ceding insurer (the original insurer) and the reinsurer, creating a framework for future transactions without the need for individual agreements for each risk. On the other hand, facultative reinsurance is arranged on a case-by-case basis, allowing the insurer to obtain reinsurance for specific policies or risks as they choose. Pro rata is a method of reinsurance where the reinsurer shares a portion of the premiums and losses of the underlying policies, often functioning under both treaty and facultative reinsurance agreements.

The term "retention" refers to the amount of risk that the primary insurer keeps and does not transfer through reinsurance. Although important in the context of risk management, it does not represent a type of reinsurance. Instead, it signifies the portion of risk that remains with the insurer following the reinsurance arrangement. Therefore, it's not classified as a type of reinsurance like the others listed. Understanding these definitions and classifications is essential for grasping the overall dynamics of risk