Automatic reinsurance is the portion of a carrierTMs life insurance risk that is automatically ceded to reinsurers under pre'negotiated treaties without individual case approval, as long as the risk falls within treaty guidelines. Once the carrier underwrites the case and assigns a rating within specified limits, the reinsurer is obliged to accept its share. Automatic reinsurance allows carriers to write larger cases, manage concentration risk, and stabilize results while keeping underwriting workflows efficient. Treaty terms define eligible products, maximum ratings, ages, amounts, and any exclusions. Automatic reinsurance contrasts with facultative reinsurance, where each case is individually reviewed and accepted or declined by the reinsurer.

Underwriters rely on automatic reinsurance to extend capacity for standard and moderately rated risks within treaty boundaries. They classify cases, confirm compliance with treaty terms, and then cede the appropriate share of risk automatically. Reinsurers monitor automatic cessions through audits and treaty reporting rather than case'by'case underwriting. BGAs may hear that a case stays automatic when it fits within these terms, indicating faster turnaround and more predictable results. Understanding automatic reinsurance helps advisors grasp why certain case profiles are easier to place and why very large or significantly impaired risks often move into facultative channels with longer timelines.