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diff b/w co and re insurnce

Ankur bansal (a) (135 Points)

20 December 2009

pls tel me diff b/w co and re insurance??

and also ki

there are 2 co insurer of a co covering 60 and 40 % risk, what does that mean??????

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Navneet Gupta (Article) (129 Points)
Replied 20 December 2009

Co-insurance: In co-insurance, a consortium of insurers undertakes the insurance contract. One of the co-insurers is appointed as the lead insurer which issues policy documents, collects premium, shares it with co- insurers, settles claims and recovers proportionate claim from other co-insurers.

Reinsurance: In re-insurance, only a single insurer undertakes the risk. However, to safeguard itself from the risk, the insurer enters into re-insurance contract with another insurer to transfer a part of the risk of original contract. In reinsurance, the insurer becomes the insured.

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Rakesh Bansal (CA) (75 Points)
Replied 20 December 2009

hiii ankur... iwill nt tell u d bookish defination.....i wil explain it to u in very simple way

COINSURANCE means where 2 or more insurer share risk and premium in pre determined ratio, on the choice of poicy holder, is known as co insurance......and the insurer sharing highest perporton of ris k and premium is known as LEADER ..... leader collects premiumand settle the claims on behalf of other insurere ok... and credit and debit the same to the account of other co insurer...Â leader and other co insurere settle thire account on monthly basisi. fine dear....

RE INSURENECE means where a insurere re insured the risk of original policy from sumÂ another insurer... its on the choice of insurer. when orginal insurer think tht in case of claim arrise he willbe nt able to settle the fullamount of claim bocz amount is so large...thn he may take tthe cover for tht addtional excess amount from anpther insurer... its is between two insurence co.. policy holder will get his claim only from original insure...thn original insurere get the claim of tht aditional excess amunt from reinsurer....

IN OTHER WORD IN REINSURENCEÂ THERE IS TWO SEPRATE RISK COVER.... FINE DEAR

now UR another query,,,, if there is two insurere sharing 60% and 40% it means they are sharing policy risk in the proportion of 60% and 40%....in case of claim insurer covering 60% risk willpay the 60% of claim amount and rest 40% will be paid by another insurer bearing 40% risk......ok dear in ths case premium will also be share by two f them in the proportion of 60:40.... all administrative work will be done by insurer covering 60% risk being a LEADER.....

i hope nw it is clear to you....in case further difficulty...plz feel free

THANXÂ and ALL D BEST

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