what is reinsurance? how does it differs from insurance?

Dexter is correct. You can learn alot more about it at:

www.wikipedia.org

It's a kind of risk management.
As you know, Insurance Industry is to manage risk using money. So that they have a risk if they need to face lots of unexpectable claims for lifes and properties, such as Typhoon, Earthquake, ....... However, they need to reinsurance for themselves to share the risk with other company and make sure even the company got trouble, their cilents still get their insurance.

reinsurance is insurance bought by insurance companies to help them cover losses so that they don't have to dip too heavily into reserves to help them pay claims.
They can buy reinsurance per loss (if there is a really big claim) or in a block (say if they suffer up to a certain level of claims.....like in a catastrophe).
Most reinsurers are based overseas, especially in Europe and the reinsurance market is almost completely unregulated so there are no solvency or premium restrictions.
Reinsurers charge whatever the market will bear.

True, but to clarify when reinsurance would be an option for a primary insurer: Say you apply for life insurance, and for some reason you don't meet the insurers underwriting guidelines. Normally, they would decline you, unless they partner with other insurers for the purposes of reinsurance. They would then go to one of their partners who might provide you with insurance based on less stringent guidelines. If they approve you, then the company with which you applied would issue a policy. You get it from them, but in fact, the policy will be UNDERWRITTEN by another insurer.

Believe it or not, insurance companies buy insurance to cover their insurance. This is called re-insurance. It's a huge business that most of us don't see because it's done at top corporate levels.