Reinsurance and Composite Brokers: Roles, Functions

Reinsurance and Composite Brokers: Roles, Functions. In the intricate of insurance and risk management, intermediaries serve as essential connectors between insurance providers and clients. Among these, Reinsurance Brokers and Composite Brokers are two highly specialized categories governed under the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018. These brokers facilitate insurance and reinsurance arrangements and play a significant role in managing risk portfolios, structuring deals, ensuring legal compliance, and enhancing market accessibility. This paper aims to provide a complete and simplified explanation of their functions, legal mandates, and operational significance in the Indian and global insurance ecosystem.
What is a Reinsurance Broker?
A Reinsurance Broker is a licensed professional intermediary registered with the Insurance Regulatory and Development Authority of India (IRDAI). They are authorized to solicit, negotiate, and arrange reinsurance contracts on behalf of insurance companies or other clients with reinsurers located either within India or abroad. The reinsurance broker does not directly underwrite insurance policies but helps insurers transfer a portion of their risk portfolios to reinsurers in exchange for a premium. These brokers also offer related services such as claims consultancy and risk management, thereby adding technical value to the insurance chain.
Functions of a Reinsurance Broker
The functions of a reinsurance broker are detailed and multifaceted. These include:
Client Risk
Reinsurance brokers begin their work by deeply understanding the client's business model, the nature of their risk exposures, and their approach to retaining or transferring risk. This knowledge helps brokers develop a tailored reinsurance solution that meets the client’s risk appetite and operational needs.
Record Maintenance
Brokers maintain accurate and detailed records of the insurance business placed with reinsurers. These records are important for transparency, audit trails, dispute resolution, and tracking of premium and claims-related transactions.
Technical Advice and Market Access
They advise clients based on complete market data about the availability and structure of reinsurance products in both Indian and global reinsurance markets. Their knowledge enables them to identify optimal risk-sharing solutions and cost-effective premium arrangements.
Reinsurance Market Database
A reinsurance broker must have an up-to-date database of reinsurance markets, including information on the solvency status, ratings, and financial soundness of reinsurers. This database helps ensure that clients are only connected with reputable and financially stable reinsurers.
Risk Management Services
Brokers also provide professional risk management advice to help clients reduce, avoid, or effectively manage potential risks. This may include structuring reinsurance treaties, advising on loss mitigation, and developing risk models.
Selection and Recommendation of Reinsurers
They help in selecting suitable reinsurers based on the client’s risk profile, market credibility, and the reinsurers’ financial and underwriting strength. This selection process is critical for ensuring a stable and secure risk transfer.
Negotiation with Reinsurers
Reinsurance brokers negotiate with reinsurers on behalf of clients to ensure the most favorable terms, pricing, and scope of coverage. These negotiations are technical and require an understanding of underwriting, loss experience, and exposure analysis.
Support in Commutation and Contractual Closure
If the reinsurance contracts need to be terminated or commuted early, brokers assist in negotiating the commutation values and ensuring fair settlement.
Client Communication and Updates
Brokers must act on client instructions promptly, provide written acknowledgments of requests, and offer regular progress reports. This maintains client confidence and ensures accountability.
Fund Handling
They are responsible for timely collection and remittance of reinsurance premiums and claims between the cedant (insurer) and reinsurer. Delays can impact policy validity or claim settlements.
Claims Negotiation and Settlement Support
Brokers help clients negotiate and settle claims with reinsurers by compiling documentation, defending claim legitimacy, and resolving disputes.
Claims Record Maintenance
Keeping complete records of past and ongoing claims is essential for regulatory compliance and future reinsurance negotiations.
Due Diligence in Reinsurer Selection
Before involving a reinsurer or a foreign insurance broker, reinsurance brokers must conduct due diligence, including evaluating credit ratings, regulatory status, and reputation.
Market Capacity Development
Brokers play a pivotal role in creating new capacity for difficult-to-insure risks or new product lines by liaising with reinsurers and identifying new opportunities.
Preliminary Loss Advice (PLA)
Upon knowledge of a loss event, brokers must issue a Preliminary Loss Advice to reinsurers in a reasonable timeframe to facilitate claim preparedness. 
Segregation of Inward and Outward Reinsurance Business
Reinsurance brokers manage two types of transactions: Inward and Outward Reinsurance.
Inward Reinsurance Business
In this scenario, Indian reinsurers accept risk from foreign insurers. Brokers facilitating inward business must:

Possess specialized knowledge about the country from which the business originates, including political conditions, local insurance laws, tax regimes, and regulatory policies.

Introduce relevant products that align with the reinsurer’s business strategy and market appetite.

Outward Reinsurance Business
This involves transferring Indian insurance risks to global reinsurance markets. Key broker duties include:

Evaluating reinsurer ratings and credibility to ensure client protection.

Ensuring timely fund transfers between cedants and reinsurers, avoiding defaults.

Ensuring compliance with the laws of the reinsurers’ country of operation while structuring cross-border reinsurance arrangements.

What is a Composite Broker?
A Composite Broker is an advanced category of insurance broker licensed by IRDAI to operate as both a Direct Insurance Broker and a Reinsurance Broker. They can solicit and arrange both primary insurance policies and reinsurance contracts for clients. This dual licensing allows them to provide end-to-end solutions to insurers and clients, especially large corporations requiring integrated risk and reinsurance advisory. 
Functions of a Composite Broker
The functions of a composite broker are a combination of those performed by direct and reinsurance brokers. Key responsibilities include:
Risk and Insurance Management
They advise clients on buying insurance policies, structuring risk programs, managing claims, and arranging appropriate reinsurance coverage.
Regulatory Separation of Roles
To prevent conflicts of interest, if a composite broker is acting as a direct broker for a client, they cannot unduly influence the insurer to appoint them as a reinsurance broker for the same risk. However, if appointed independently by the insurer through a transparent process, they must ensure:

Strong internal controls to manage any potential conflict.

Transparent documentation and clear segregation of responsibilities to protect the interests of both the insurer and the insured.

Maintaining Dual Compliance Standards
They must comply with both sets of rules applicable to direct and reinsurance brokers, including reporting, training, and record-keeping requirements. 
Regulatory Framework: IRDAI (Insurance Brokers) Regulations, 2018
The IRDAI regulations lay down the legal and compliance framework for all brokers. Key provisions include:
Licensing Categories

Direct Broker: For arranging general and life insurance.

Reinsurance Broker: For arranging reinsurance only.

Composite Broker: For both insurance and reinsurance functions.

Minimum Capital Requirements

Direct Broker: INR 75 lakhs

Reinsurance Broker: INR 4 crores

Composite Broker: INR 5 crores

Training and Certification
All brokers and employees must undergo IRDAI-approved training and certification exams. Ongoing professional development is mandatory to maintain industry standards.
Code of Conduct

Serve client interest above all.

Maintain confidentiality and transparency.

Avoid misrepresentation and conflicts of interest.

Ensure full disclosure of fees and commissions.

Reporting and Audits
Brokers must submit regular compliance reports, maintain transaction records, undergo audits, and ensure financial transparency. 
Importance of Reinsurance and Composite Brokers in the Insurance Ecosystem
Enhanced Risk Transfer Mechanism
Brokers enable insurers to cede complex and high-value risks to global reinsurance markets, thus enhancing underwriting capacity and reducing concentration of risks.
Market Intelligence and Technical Advice
They provide updated information about market trends, pricing, capacity, and legal requirements across jurisdictions, assisting insurers and clients in making informed decisions.
Claims Advocacy and Support
In complex claims, especially involving multiple reinsurers, brokers act as claims advocates, ensuring timely and fair settlements.
Innovation and Product Development
Brokers play a significant role in developing innovative insurance and reinsurance products by identifying coverage gaps and proposing new solutions.
Challenges Faced by Brokers

Global Regulatory Compliance: Legal requirements in multiple jurisdictions for cross-border placements.

Maintaining Financial Security: Ensuring reinsurers have sufficient solvency to honor claims.

Conflict Management: Especially relevant for composite brokers balancing dual roles.

Emerging Risk: Addressing newer risks like cybercrime, climate change, pandemics, and technological disruptions.

Conclusion
Reinsurance and Composite Brokers are key enablers in the insurance value chain. They bring together deep technical knowledge, market access, and regulatory compliance to provide end-to-end risk management solutions for insurers and clients. Their roles are governed by IRDAI regulations to ensure ethical conduct, transparency, and market efficiency.
As India continues to integrate with global financial markets and faces emerging risks, the importance of technically skilled, compliant, and innovative brokers will only grow. These intermediaries will remain central to building insurance resilience, financial security, and sustainable growth in the economy.
FAQs
Q1. What is the difference between a Reinsurance Broker and a Reinsurer?
Ans. A Reinsurance Broker acts as an intermediary between insurance companies and reinsurers. They do not underwrite risk but help insurance companies transfer risk by negotiating and arranging reinsurance contracts. In contrast, a reinsurer is a company that actually accepts the transferred risk in return for a premium.
Q2. Can an insurance company act as its own reinsurance broker?
Ans. No. As per IRDAI regulations, reinsurance brokers must be independent entities registered under the Insurance Brokers Regulations, 2018. This ensures unbiased advisory and placement services, avoiding conflict of interest.
Q3. How do reinsurance brokers earn their income?
Ans. Reinsurance brokers primarily earn through commissions or fees paid by the cedant (insurer) or reinsurer for arranging the transaction. These charges must be transparently disclosed in line with IRDAI’s Code of Conduct.
Q4. What qualifications are required to become a reinsurance broker in India?
Ans. The applicant must be a company registered under the Companies Act and meet capital requirements (Rs.4 crores for Reinsurance Brokers, RS.5 crores for Composite Brokers). Directors and employees must undergo IRDAI-approved training and pass certification exams. Fit and proper criteria regarding financial integrity and competency must also be met.
Q5. Why is solvency rating important in selecting a reinsurer?
Ans. Solvency ratings from agencies like A.M. Best, Moody’s, or S&P indicate the financial strength and claims-paying ability of reinsurers. Brokers use these ratings to ensure their clients partner with stable, reliable reinsurers who can fulfill obligations in times of large losses.
Q6. What is the significance of a Preliminary Loss Advice (PLA)?
Ans. A PLA is an early notification sent by the broker to the reinsurer about a potential claim. It helps reinsurers prepare for claim handling, financial provisioning, and appointing surveyors or experts, especially in high-value or catastrophic losses.
Q7. Are Composite Brokers allowed to use the same team for direct and reinsurance broking?
Ans. While the same entity holds the license, IRDAI mandates clear operational segregation to avoid conflict of interest. Separate teams, documentation, and reporting lines are required to ensure fairness and protect client and insurer interests.
Q8. What is a Treaty vs. Facultative Reinsurance, and how do brokers handle them?
Ans. Treaty Reinsurance covers a portfolio of policies and is negotiated annually or periodically.

Facultative Reinsurance is case-specific and arranged for individual risks.
 Reinsurance brokers structure, negotiate, and place both types depending on client needs, risk size, and market appetite.

Q9. How do reinsurance brokers help in emerging risks like cyber insurance?
Ans. Brokers play a proactive role by engaging with global markets to create capacity and solutions for new risk classes. They help design cyber reinsurance products, educate insurers, and arrange risk transfer deals suited to the Indian market’s evolving exposures.
Q10. What compliance reporting is required for a reinsurance or composite broker?
Ans. They must file quarterly and annual returns with IRDAI, including data on premium placements, commission earned, client engagements, solvency margins of reinsurers, and training updates. Internal and statutory audits are also mandatory.
Q11. Can international brokers operate in India without IRDAI registration?
Ans. No. All insurance and reinsurance broking activities within Indian jurisdiction must be conducted through entities registered with IRDAI. International brokers can only operate through tie-ups or co-broking agreements with licensed Indian brokers, under IRDAI supervision.
Q12. How does a composite broker protect client confidentiality across services?
Ans. They must adopt internal firewalls and maintain strict data separation protocols. This includes separate IT systems, confidentiality agreements, and independent file management for insurance and reinsurance functions.
Q13. How does IRDAI ensure ethical conduct by brokers?
Ans. IRDAI enforces a strict Code of Conduct, periodic inspections, licensing renewal conditions, and penal actions for violations. Brokers must also undergo compliance audits, maintain grievance redressal systems, and preserve transparency in all dealings.
Q14. What are the penalties for non-compliance by reinsurance or composite brokers?
Ans. Violations such as misrepresentation, conflict of interest, non-remittance of funds, or unauthorized activities can lead to penalties including license suspension, financial fines, and blacklisting under IRDAI’s enforcement powers.
Q15. What are the future trends shaping reinsurance broking in India?
Ans. Key trends include:

Rise in tech-enabled risk modeling and claims tracking.

Greater emphasis on ESG-compliant reinsurers.

Growing appetite for catastrophe bonds and alternative risk transfer.

Increasing cross-border collaborations under global treaties like IAIS and WIPO.

In the intricate of insurance and risk management, intermediaries serve as essential connectors between insurance providers and clients. Among these, Reinsurance Brokers and Composite Brokers are two highly specialized categories governed under the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018. These brokers facilitate insurance and reinsurance arrangements and play a significant role in managing risk portfolios, structuring deals, ensuring legal compliance, and enhancing market accessibility. This paper aims to provide a complete and simplified explanation of their functions, legal mandates, and operational significance in the Indian and global insurance ecosystem.

What is a Reinsurance Broker?

A Reinsurance Broker is a licensed professional intermediary registered with the Insurance Regulatory and Development Authority of India (IRDAI). They are authorized to solicit, negotiate, and arrange reinsurance contracts on behalf of insurance companies or other clients with reinsurers located either within India or abroad. The reinsurance broker does not directly underwrite insurance policies but helps insurers transfer a portion of their risk portfolios to reinsurers in exchange for a premium. These brokers also offer related services such as claims consultancy and risk management, thereby adding technical value to the insurance chain.

Functions of a Reinsurance Broker

The functions of a reinsurance broker are detailed and multifaceted. These include:

Client Risk

Reinsurance brokers begin their work by deeply understanding the client's business model, the nature of their risk exposures, and their approach to retaining or transferring risk. This knowledge helps brokers develop a tailored reinsurance solution that meets the client’s risk appetite and operational needs.

Record Maintenance

Brokers maintain accurate and detailed records of the insurance business placed with reinsurers. These records are important for transparency, audit trails, dispute resolution, and tracking of premium and claims-related transactions.

Technical Advice and Market Access

They advise clients based on complete market data about the availability and structure of reinsurance products in both Indian and global reinsurance markets. Their knowledge enables them to identify optimal risk-sharing solutions and cost-effective premium arrangements.

Reinsurance Market Database

A reinsurance broker must have an up-to-date database of reinsurance markets, including information on the solvency status, ratings, and financial soundness of reinsurers. This database helps ensure that clients are only connected with reputable and financially stable reinsurers.

Risk Management Services

Brokers also provide professional risk management advice to help clients reduce, avoid, or effectively manage potential risks. This may include structuring reinsurance treaties, advising on loss mitigation, and developing risk models.

Selection and Recommendation of Reinsurers

They help in selecting suitable reinsurers based on the client’s risk profile, market credibility, and the reinsurers’ financial and underwriting strength. This selection process is critical for ensuring a stable and secure risk transfer.

Negotiation with Reinsurers

Reinsurance brokers negotiate with reinsurers on behalf of clients to ensure the most favorable terms, pricing, and scope of coverage. These negotiations are technical and require an understanding of underwriting, loss experience, and exposure analysis.

Support in Commutation and Contractual Closure

If the reinsurance contracts need to be terminated or commuted early, brokers assist in negotiating the commutation values and ensuring fair settlement.

Client Communication and Updates

Brokers must act on client instructions promptly, provide written acknowledgments of requests, and offer regular progress reports. This maintains client confidence and ensures accountability.

Fund Handling

They are responsible for timely collection and remittance of reinsurance premiums and claims between the cedant (insurer) and reinsurer. Delays can impact policy validity or claim settlements.

Claims Negotiation and Settlement Support

Brokers help clients negotiate and settle claims with reinsurers by compiling documentation, defending claim legitimacy, and resolving disputes.

Claims Record Maintenance

Keeping complete records of past and ongoing claims is essential for regulatory compliance and future reinsurance negotiations.

Due Diligence in Reinsurer Selection

Before involving a reinsurer or a foreign insurance broker, reinsurance brokers must conduct due diligence, including evaluating credit ratings, regulatory status, and reputation.

Market Capacity Development

Brokers play a pivotal role in creating new capacity for difficult-to-insure risks or new product lines by liaising with reinsurers and identifying new opportunities.

Preliminary Loss Advice (PLA)

Upon knowledge of a loss event, brokers must issue a Preliminary Loss Advice to reinsurers in a reasonable timeframe to facilitate claim preparedness.

Segregation of Inward and Outward Reinsurance Business

Reinsurance brokers manage two types of transactions: Inward and Outward Reinsurance.

Inward Reinsurance Business

In this scenario, Indian reinsurers accept risk from foreign insurers. Brokers facilitating inward business must:

Possess specialized knowledge about the country from which the business originates, including political conditions, local insurance laws, tax regimes, and regulatory policies.
Introduce relevant products that align with the reinsurer’s business strategy and market appetite.

Outward Reinsurance Business

This involves transferring Indian insurance risks to global reinsurance markets. Key broker duties include:

Evaluating reinsurer ratings and credibility to ensure client protection.
Ensuring timely fund transfers between cedants and reinsurers, avoiding defaults.
Ensuring compliance with the laws of the reinsurers’ country of operation while structuring cross-border reinsurance arrangements.

What is a Composite Broker?

A Composite Broker is an advanced category of insurance broker licensed by IRDAI to operate as both a Direct Insurance Broker and a Reinsurance Broker. They can solicit and arrange both primary insurance policies and reinsurance contracts for clients. This dual licensing allows them to provide end-to-end solutions to insurers and clients, especially large corporations requiring integrated risk and reinsurance advisory.

Functions of a Composite Broker

The functions of a composite broker are a combination of those performed by direct and reinsurance brokers. Key responsibilities include:

Risk and Insurance Management

They advise clients on buying insurance policies, structuring risk programs, managing claims, and arranging appropriate reinsurance coverage.

Regulatory Separation of Roles

To prevent conflicts of interest, if a composite broker is acting as a direct broker for a client, they cannot unduly influence the insurer to appoint them as a reinsurance broker for the same risk. However, if appointed independently by the insurer through a transparent process, they must ensure:

Strong internal controls to manage any potential conflict.
Transparent documentation and clear segregation of responsibilities to protect the interests of both the insurer and the insured.

Maintaining Dual Compliance Standards

They must comply with both sets of rules applicable to direct and reinsurance brokers, including reporting, training, and record-keeping requirements.

Regulatory Framework: IRDAI (Insurance Brokers) Regulations, 2018

The IRDAI regulations lay down the legal and compliance framework for all brokers. Key provisions include:

Licensing Categories

Direct Broker: For arranging general and life insurance.
Reinsurance Broker: For arranging reinsurance only.
Composite Broker: For both insurance and reinsurance functions.

Minimum Capital Requirements

Direct Broker: INR 75 lakhs
Reinsurance Broker: INR 4 crores
Composite Broker: INR 5 crores

Training and Certification

All brokers and employees must undergo IRDAI-approved training and certification exams. Ongoing professional development is mandatory to maintain industry standards.

Code of Conduct

Serve client interest above all.
Maintain confidentiality and transparency.
Avoid misrepresentation and conflicts of interest.
Ensure full disclosure of fees and commissions.

Reporting and Audits

Brokers must submit regular compliance reports, maintain transaction records, undergo audits, and ensure financial transparency.

Importance of Reinsurance and Composite Brokers in the Insurance Ecosystem

Enhanced Risk Transfer Mechanism

Brokers enable insurers to cede complex and high-value risks to global reinsurance markets, thus enhancing underwriting capacity and reducing concentration of risks.

Market Intelligence and Technical Advice

They provide updated information about market trends, pricing, capacity, and legal requirements across jurisdictions, assisting insurers and clients in making informed decisions.

Claims Advocacy and Support

In complex claims, especially involving multiple reinsurers, brokers act as claims advocates, ensuring timely and fair settlements.

Innovation and Product Development

Brokers play a significant role in developing innovative insurance and reinsurance products by identifying coverage gaps and proposing new solutions.

Challenges Faced by Brokers

Global Regulatory Compliance: Legal requirements in multiple jurisdictions for cross-border placements.
Maintaining Financial Security: Ensuring reinsurers have sufficient solvency to honor claims.
Conflict Management: Especially relevant for composite brokers balancing dual roles.
Emerging Risk: Addressing newer risks like cybercrime, climate change, pandemics, and technological disruptions.

Conclusion

Reinsurance and Composite Brokers are key enablers in the insurance value chain. They bring together deep technical knowledge, market access, and regulatory compliance to provide end-to-end risk management solutions for insurers and clients. Their roles are governed by IRDAI regulations to ensure ethical conduct, transparency, and market efficiency.

As India continues to integrate with global financial markets and faces emerging risks, the importance of technically skilled, compliant, and innovative brokers will only grow. These intermediaries will remain central to building insurance resilience, financial security, and sustainable growth in the economy.

FAQs

Q1. What is the difference between a Reinsurance Broker and a Reinsurer?

Ans. A Reinsurance Broker acts as an intermediary between insurance companies and reinsurers. They do not underwrite risk but help insurance companies transfer risk by negotiating and arranging reinsurance contracts. In contrast, a reinsurer is a company that actually accepts the transferred risk in return for a premium.

Q2. Can an insurance company act as its own reinsurance broker?

Ans. No. As per IRDAI regulations, reinsurance brokers must be independent entities registered under the Insurance Brokers Regulations, 2018. This ensures unbiased advisory and placement services, avoiding conflict of interest.

Q3. How do reinsurance brokers earn their income?

Ans. Reinsurance brokers primarily earn through commissions or fees paid by the cedant (insurer) or reinsurer for arranging the transaction. These charges must be transparently disclosed in line with IRDAI’s Code of Conduct.

Q4. What qualifications are required to become a reinsurance broker in India?

Ans. The applicant must be a company registered under the Companies Act and meet capital requirements (Rs.4 crores for Reinsurance Brokers, RS.5 crores for Composite Brokers). Directors and employees must undergo IRDAI-approved training and pass certification exams. Fit and proper criteria regarding financial integrity and competency must also be met.

Q5. Why is solvency rating important in selecting a reinsurer?

Ans. Solvency ratings from agencies like A.M. Best, Moody’s, or S&P indicate the financial strength and claims-paying ability of reinsurers. Brokers use these ratings to ensure their clients partner with stable, reliable reinsurers who can fulfill obligations in times of large losses.

Q6. What is the significance of a Preliminary Loss Advice (PLA)?

Ans. A PLA is an early notification sent by the broker to the reinsurer about a potential claim. It helps reinsurers prepare for claim handling, financial provisioning, and appointing surveyors or experts, especially in high-value or catastrophic losses.

Q7. Are Composite Brokers allowed to use the same team for direct and reinsurance broking?

Ans. While the same entity holds the license, IRDAI mandates clear operational segregation to avoid conflict of interest. Separate teams, documentation, and reporting lines are required to ensure fairness and protect client and insurer interests.

Q8. What is a Treaty vs. Facultative Reinsurance, and how do brokers handle them?

Ans. Treaty Reinsurance covers a portfolio of policies and is negotiated annually or periodically.

Facultative Reinsurance is case-specific and arranged for individual risks.

Reinsurance brokers structure, negotiate, and place both types depending on client needs, risk size, and market appetite.

Q9. How do reinsurance brokers help in emerging risks like cyber insurance?

Ans. Brokers play a proactive role by engaging with global markets to create capacity and solutions for new risk classes. They help design cyber reinsurance products, educate insurers, and arrange risk transfer deals suited to the Indian market’s evolving exposures.

Q10. What compliance reporting is required for a reinsurance or composite broker?

Ans. They must file quarterly and annual returns with IRDAI, including data on premium placements, commission earned, client engagements, solvency margins of reinsurers, and training updates. Internal and statutory audits are also mandatory.

Q11. Can international brokers operate in India without IRDAI registration?

Ans. No. All insurance and reinsurance broking activities within Indian jurisdiction must be conducted through entities registered with IRDAI. International brokers can only operate through tie-ups or co-broking agreements with licensed Indian brokers, under IRDAI supervision.

Q12. How does a composite broker protect client confidentiality across services?

Ans. They must adopt internal firewalls and maintain strict data separation protocols. This includes separate IT systems, confidentiality agreements, and independent file management for insurance and reinsurance functions.

Q13. How does IRDAI ensure ethical conduct by brokers?

Ans. IRDAI enforces a strict Code of Conduct, periodic inspections, licensing renewal conditions, and penal actions for violations. Brokers must also undergo compliance audits, maintain grievance redressal systems, and preserve transparency in all dealings.

Q14. What are the penalties for non-compliance by reinsurance or composite brokers?

Ans. Violations such as misrepresentation, conflict of interest, non-remittance of funds, or unauthorized activities can lead to penalties including license suspension, financial fines, and blacklisting under IRDAI’s enforcement powers.

Q15. What are the future trends shaping reinsurance broking in India?

Ans. Key trends include:

Rise in tech-enabled risk modeling and claims tracking.
Greater emphasis on ESG-compliant reinsurers.
Growing appetite for catastrophe bonds and alternative risk transfer.
Increasing cross-border collaborations under global treaties like IAIS and WIPO.