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      Question

      What is the difference between "reinsurance" and

      "co-insurance"?
      A Reinsurance is a risk-sharing agreement between insurers, while co-insurance is a risk-sharing agreement where multiple insurers jointly share the risk of insuring a policyholder. Correct Answer Incorrect Answer
      B Reinsurance applies to life insurance, while co-insurance applies to property insurance. Correct Answer Incorrect Answer
      C Reinsurance is mandatory, while co-insurance is optional. Correct Answer Incorrect Answer
      D Reinsurance is used to increase coverage, while co-insurance is used to reduce premiums. Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      • Reinsurance involves risk-sharing between insurers, while co-insurance involves risk-sharing between multiple insurers, to distribute large risks that are beyond the capacity of a single insurer.

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