Reinsurance is an arrangement wherein an insurer (aka ceding company) opts for insurance from a reinsurance company to minimize potential losses tied to insurance issued by the former. Simply put, reinsurance provides a predetermined threshold of protection to insurance issued by the insurers. From home insurance to auto insurance, reinsurance covers a wide array of offerings, enabling insurers to operate seamlessly without wondering about imminent financial loss.<\/p>\n\n\n\n
Reinsurance companies can render insurance to seeding companies facilitating one or more type of insurance. Just like insurance companies, reinsurance firms also fall under the IRDAI<\/strong>[1]<\/strong><\/a><\/sup> ambit, complying with specific guidelines concerning registration, management, policy issuance, claim settlement, etc. Let\u2019s understand more about how these entities operate and what legal implications they attract.<\/p>\n\n\n\n