4. Conclusion

i. The actions of Unison put TATA-AIG in a difficult position. They suffered a loss because they did not have adequate reinsurance protection as a result of which their financials were impacted. Such an action deserves the highest level of attention as it hits the very foundation of insurance/ reinsurance business of placing trust with a reinsurance broker. A cedant relies on the reinsurance slip submitted by the reinsurance broker to assume that the risk is placed and there is no gap in reinsurance protection. lf the reinsurance protection is found to be non-existent, the entire risk that was supposed to be passed on to the reinsurer falls into the lap of the direct insurer who is obliged to make good the loss, as he has issued an insurance policy to the policyholder. lt is because ofthis important nature of transaction that utmost care has to be exercised by the insurer and the insurance broker. Any shortcomings can have very serious consequences even to the extent of a failure of an insurance company.

ii. However, given the documents shared by Unison with the Authority, it appears that Unison were themselves cheated by Confiance. Confiance who could not place reinsurance for crop insurance, forged the reinsurance slip and submitted as original to Unison.

iii. Based on above decisrons in charge no. 1, 2 & 3 M/s. Unison lnsurance Brokers Pvt Ltd., is hereby directed to pay a penalty of Rs.1,00,00,000/- (Rupees One Crore only)

iv. The penalty of Rs 1,00,00,0001 (Rs. One Crore) shall be remitted by Unison through NEFT / RTGS (details of which will be communicated separately) within a period of 15 days from the date of receipt of this order. An intrmation of remittance by Unison may be sent to Shri. Randip Singh Jagpal, Chief General Manager (lntermediaries), lRDA|, Sy. No. 1 15/'1, Financial District, Nanakramguda, Hyderabad, 500032.

v. lf the lnsurance Broker feels aggrreved by the above decision of the Authority, an appeal may be preferred to the Securities Appellate Tribunal as per Section 1 1 0 of the lnsurance Act, 1938.

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