Question
What is the role of reinsurance companies in the Indian
insurance market?Solution
Reinsurance companies play a crucial role in the Indian insurance market by providing insurance to insurance companies. The primary function of reinsurance is to insure the risks of insurance companies and protect them from catastrophic losses. Reinsurance companies work as risk-sharing partners with insurance companies and help them manage their risks more efficiently. In India, reinsurance is regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and operates under the provisions of the Insurance Act, 1938. Hence, option B is correct.
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