Page 121 - Reinsurance Management IC85

Reinsurance Management

considered necessary in order to ensure that the
Indian insurer is not merely fronting for a foreign
insurer but is taking a reinsurance cover.

Develop adequate capacity: Every insurer shall
cede such percentage of the sum assured on each
policy for different classes of insurance written in
India to the Indian reinsurer as maybe specified
by the IRDA in accordance with the provisions of
Insurance Act, 1938.

Secure the best possible protection: The
reinsurance program has to be cost effective. It is
therefore necessary that the reinsurance contract
is obtained with a reinsurer who offers the
reinsurance business at lowest cost.

Simplify the administration of business: The
reinsurance business should not be complex in
regard to its administration. The reinsurance
contract is to be easily understood and can be
implemented in such a way that it does not involve

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