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The risks associated with reinsurance include counterparty risk, which relates to the potential inability of the reinsurer to fulfill its obligations. Additionally, the complexity of reinsurance agreements can lead to misunderstandings or disputes over claims. Insurers must conduct thorough due diligence when choosing reinsurers to mitigate these risks. Utilizing the 'Application For Authority-Foreign Reinsurers' helps in addressing regulatory concerns and ensuring compliance.
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