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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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