Question

What is the concept of co-insurance?

a.

An insurer shares direct responsibility for a risk with one or more insurers participating as co-insurers

b.

An insurer buys a policy from another insurer to cover a specific risk

c.

An insurer shares profits with the reinsurer

d.

An insurer transfers all responsibility for a risk to the reinsurer

Posted under IC85 Reinsurance Management

Answer: (a).An insurer shares direct responsibility for a risk with one or more insurers participating as co-insurers Explanation:Co-insurance is the concept whereby one insurer shares direct responsibility for a risk with one or more insurers participating as co-insurers, each insurer's responsibility being restricted to the amount he underwrites on the original policy.

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