REINSURANCE BUSINESS ON INSURANCE MARKET OF THE REPUBLIC OF SRPSKA

In many cases in insurancebusiness, the insurer takes the risk which by thelevel of insurance or probable maximum loss(PML) exceeds its financial capacity. The insurercan cover with reinsurance and coinsurance thepart of the contractual obligations that exceed thecapacity of the insurance company. Coinsuranceoccurs when risk is shared among several insurers,and reinsurance occurs when the excess of risk istransferred from one to more reinsurers.Reinsurance is the process which enables theinsurance company to avoid the risk of disasters inthe insurance mechanism. Reinsurance is the reinsuranceor insurance of the insurance."Reinsured" is an insurance company whoseinsurance risks are reinsured in whole or in part,while the "reinsurer" is the company of reinsurancebusiness. Reinsurance is of highly importance forthe safety of management of the insurers, because itincreases the capacity of risk-taking in insurance,protects one's own safety and safety of thereinsured. In addition, this can be supported by acommon saying which is used in the insurancesector and that is: "good insurance begins withreinsurance."