Page 58 - Life Insurance underwriting Ebook IC 22

CHAPTER –6

REINSURANCE

1. Understand the concept of reinsurance

1.1. Concept of reinsurance

Reinsurance is the way in which one direct insurance company (also

called ceding company) transfers (cedes) part of the risk to another
life company.

Cedant - is the direct insurance company that transfers the risk.

Cede –is the transfer of risk

Reinsurer - is the insurance company that accepts the transfer of risk
from the ceding company)

a) Reinsurance helps to reduce the liability of the direct insurer to a
large extent.

b) The Indian regulations specify that a reinsurer cannot do direct

insurance business like a direct company.

c) The concept of reinsurance came into being with marine

insurance

d) Some of the reinsurers of life insurance are

✓Swiss re

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