Voluntary insurance - Insurance underwriting

Voluntary insurance

Under the contract of voluntary insurance against accidents and diseases, the object of insurance is property interests related to the life, health and working capacity of the insured person. The wording of the main terms is slightly different for different insurers. As an example, the main definitions from the Rules of voluntary insurance against accidents and illnesses of the insurer VTB-Insurance can be cited.

Accident is an actual, sudden, unforeseen event that results from external causes, which resulted in a disability in the health of the insured, resulting in temporary or permanent disability or death.

Accidents include exposure to the following external factors: the natural phenomenon of nature, explosion, burn, frostbite, drowning, electric shock, lightning, sunstroke, attack by intruders or animals, including snakes, and insect bites that led to the onset of anaphylactic shock, the fall of an object or the insured, sudden suffocation, accidental ingress of foreign bodies into the respiratory tract, accidental acute poisoning with poisonous plants, chemical substances (about yshlennymi and household), medicines, as well as injuries when moving or means of transport when they crash, with machines, mechanisms, weapons and all sorts of instruments. The insurer and the policyholder have the right to specify a different list of events relating to the accident when signing the insurance contract.

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Disease (disease) is a diagnosis established by a medical institution on the basis of a definition of the substance and peculiarities of the insured's state of health deviation from normal after a comprehensive study, first diagnosed by the doctor after the insurance contract came into force, or exacerbation in the period of validity of the contract of insurance of a chronic disease declared by the insured (insured person) in the insurance application and accepted by the insurer for insurance.

Temporary disability - the state of loss of ability to work for an insured person for a limited period of time, accompanied by the release of the insured by the medical institution from work for the period necessary for treatment and recovery.

The following events are recognized as insured events:

1. Bodily injury (injury) of the insured, stipulated by the list of insured events. Such a list is made out in the form of a table of insurance payments as a result of an accident (a fragment of such a table is given in Table 7.2). Similar tables are used in some European countries to designate payments for compulsory social insurance.

2. Temporary disability and (or) hospitalization of the insured as a result of an accident and illness.

3. Critical (deadly) disease of the insured, provided and determined in accordance with the list of critical diseases established by the insurer, first diagnosed during the validity period of the insurance contract.

4. Full permanent disability or death of the insured with the establishment of a disability as a result of an accident and illness.

Table 7.2. Insurance payments with bodily injury (trauma) of the insured due to an accident (detail)

Damage to ICD-10

Payment (% insured amount)

S00-S09. Head injuries that caused surgical intervention (open reposition, osteosynthesis of fragments, trepanation of the skull, operations with capsule-ligament apparatus, vessels, nerves, excluding skeletal traction, primary surgical treatment and removal of hematomas with superficial trauma and open wound of the head). Additional payment

5

S00. Superficial injury of the head (bruise with the development of bruising, hematoma) with a treatment period of more than 21 days

4

S01. Open wound of the head (scalp, face), including bitten, requiring stitches, depending on the duration of treatment (7-21 days or more)

2-4 and up to 6

S02.0. Fracture of the cranial vault

15

S02.1. Fracture of skull base

20

S02.4. Fracture of the malar bone and upper jaw

5

S02.5. Fracture from 1 to 11 teeth or more

5-25

S02.6. Fracture of the lower jaw

5

These events are recognized as insurance events if they occurred during the validity period of the insurance contract or within one year from the date of the accident or illness.

As usual exceptions, the cases listed above, which occurred as a result of the following circumstances, are recognized:

• committing (attempted to commit) an insured, insured or beneficiary of an intentional crime in a direct causal relationship with the insured event;

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• alcohol, narcotic or toxic intoxication and (or) poisoning of the insured, except for cases of coercion of the insured to intoxication;

• management of the insured person by any vehicle without the right to control or after the use of medicines contraindicated in driving a vehicle or transferring to the insured management a person who did not have the appropriate right or was in a state of alcohol, drug or toxic intoxication or after using medicinal products preparations, contraindicated in driving a vehicle;

• treatment of diseases or consequences of accidents that occurred before or after the end of the validity period of the voluntary insurance contract, of which the insurer was not informed in advance;

• Accidents that have occurred as a result of any illness of the insured person

• Illnesses of the insured person, sexually transmitted diseases, including HIV infection and AIDS;

• Suicide or attempted suicide, except for cases of coercion of the insured or suicide cases after at least 2 years from the date of the voluntary insurance contract (clause 3 of Article 963 of the Civil Code of the Russian Federation);

• force majeure, stipulated by Art. 964 of the Civil Code of the Russian Federation;

• intent of the insured and (or) the insured;

• Other circumstances stipulated by the terms of the insurance contract (occupations of professional sports or some kinds of amateur sports, participation in competitions on vehicles, etc., pregnancy and childbirth).

Currently, the majority of commercial insurers rate for voluntary insurance against accidents and diseases is calculated by actuarial methods based on their own (or borrowed) insurance statistics, taking into account the following main factors:

1) working conditions (professional risk, frequency and place of travel, etc.);

2) insurance coverage time (around the clock or only during business hours);

3) the list of covered insurance risks;

4) forms of leisure (dangerous sports, entertainment, etc.);

5) the age of the insured.

The underwriting of insurance risks of accidents and diseases is carried out in several stages.

1. Underwriting of the professions of the insured is carried out on the basis of an application for insurance, and based on its results, a basic tariff is established, depending on the occupational risk class and the coverage period (during the period of employment or around the clock). Approximate values ​​of the basic insurance tariff for voluntary insurance against accidents and illnesses (term of insurance - one year) are given in Table. 7.3.

Table 7.3. Basic insurance tariffs (% of the insured amount)

Insurance Option

Class

Risk

Set of insurance risks

Death

Death, disability

Death, trauma

Death, disability, trauma

Option I.

In the performance of work (office) duties

Regular transport is used to travel to/from work

I

0.11

0.17

0.44

0.50

II

0.15

0.23

0.60

0.67

III

0.24

0.36

0.91

1.03

IV

0.35

0.52

1.32

1.49

V

0.56

0.83

2.08

2.35

Service transport is not used to travel to/from work

I

0.08

0.14

0.20

0.25

II

0.10

0.16

0.32

0.36

III

0.17

0.25

0.63

0.71

IV

0.28

0.42

1.04

1.18

V

0.49

0.72

1.80

2.03

Option II.

When performing work (office) duties and at home

I

0.21

0.28

0.93

1.00

II

0.26

0.34

1.09

1.17

III

0.34

0.47

1.40

1.53

IV

0.46

0.63

1.81

1.99

V

0.66

0.94

2.57

2.85

In Table. 7.3 classes of occupational risk are grouped as follows.

Class I - faces with & quot; sedentary & quot; work, highly qualified specialists who are not directly involved in the production process or a similar process (directors, managers, clerical employees).

Class II - persons directly supervising the production processes or similar processes, but not participating in them (masters, foremen, etc.), as well as highly skilled workers with a low level of manual labor.

Class III - skilled workers with predominantly manual labor, semi-skilled workers with a moderate level of manual labor.

Class IV - low-skilled workers primarily manual labor, unskilled workers whose professional risks are acceptable to the insurer.

Class V - workers engaged in underground work.

The content of classes of relevant qualifications may differ slightly from different insurers. Insurers can set special rates for certain professions (for example, doctors or lawyers). Class I is considered basic, and the tariffs accepted for it are standard.

Foreign Experience

In practice, the British insurers, on average, the tariffs for class II exceed the tariffs for class I by 1.75 times, for class III - 2 times, for classes IV-V - about 3 times.

If there are special conditions for the professional activity of the insured person, increasing his risk level in comparison with other employees of the same professional class, he is transferred to the next class of occupational risk (the exception is the insured, initially belonging to class V). Under special conditions of professional activity are understood:

• business trips at least four times a year or regular travels inside the village and its environs;

• departures in & quot; hot & quot; points or zones of natural disasters;

• work with dangerous (poisonous, explosive) substances;

• work in a violated safety environment;

• Other unfavorable conditions (working in the open air, in water, at altitude, in the open sea, in conditions of high humidity, high or low temperature, low or high atmospheric pressure, etc.).

2. Simplified health underwriting is carried out based on the questionnaire of the insured persons (or annexes to the insurance contract) to identify the diseases included in the list of exceptions to the insurance coverage. The verification of this information at the underwriting stage is not carried out. In case of reporting false information about the health of the insured, the insurer uses its right to invalidate the insurance contract (Article 944 of the Civil Code of the Russian Federation) and denial of insurance payment at the stage of settlement of losses.

3. The age of the insured persons is determined (according to the list of insured persons attached to the application for insurance) and correction factors are assigned in accordance with the Tariff Guide (bonus-malus system). An example of the values ​​of the correction factors is given in Table. 7.4.

Table 7.4. Correction factor to take into account the age of the insured *

Age of the insured person, years

Up to 19

19-25

26-50

51-60

Over 60

Coefficient, not lower than

1.08

1.05

0.9

1.07

1.15

* Usually used with an insured amount exceeding the limit set by the insurer.

4. For the conditions of round-the-clock insurance coverage, the underwriting of the way of life is carried out based on the questionnaire of the insured or the data of the special annex to the insurance application and correction factors are assigned in accordance with the Tariff Guide (Bonus Malus System). An example of the values ​​of the correction factors is given in Table. 7.5.

For individual insurance against accidents and illnesses, with a large sum insured that exceeds the annual income of the insured by several times, a financial and, if necessary, criminal underwriting of sources of income is performed in order to avoid attempts of insurance fraud.

Table 7.5. Increasing coefficient, taking into account the activities of the insured at leisure

Activity type

Coefficient, not lower than

Automotorport, mountaineering, boxing, martial arts, hang gliding, parachuting, speleology, snorkeling, windsurfing, snowboarding, rafting, weightlifting, other especially dangerous sports; extreme travel

2.5-3.0

Trampoline, handball, downhill skiing, wrestling, judo, water skiing, biking, horse riding, skating, orienteering, ice hockey

1.7-2.0

Volleyball, football, hockey, handball, basketball, hockey

1.5

Athletics, gymnastics, swimming (except underwater), tennis, croquet, golf, cross-country skiing, other kinds of sport of low risk

1.0-1.2

Absence of traumatic activities

0.95

Practice questions

In the practice of one of the largest Russian insurers in the late 1990s. was identified by the insured (boiler stoker), who regularly insured against accidents and illnesses and as regularly himself broke his fingers on his hand, imitating the insurance case.

The following factors may also indicate the presence of insurance fraud risk

:

significant fluctuations in wages, fees in the form of fees and commissions ;

seasonal work, the presence of a large number of short-term contracts;

• Work at home;

work that requires special skills and qualifications;

• work that can be paid in various forms (difference in income definitions ).

• For collective insurance, for large insurance sums for individual subgroups that differ sharply from the rest of the insured by age, social status (for example, the managers of the insurer), the level of payment, it is advisable to conclude a separate insurance contract. Underwriting for managers and key specialists in collective insurance in foreign practice has been called the financial underwriting of key specialists

This procedure of analysis and selection of risks has the following features:

• the amount of the claimed sum insured for certain key specialists should not be so large that the insured was interested in initiating insured events;

• the term of insurance payments should not be large so that the insured does not have time to lose qualification, otherwise the insured will be interested in continuing insurance payments;

• In the insurance of key employees, first of all, small and medium-sized firms are interested, since with a large staff there is a rotation of staff and delegation of duties;

• the key specialist should not be close to retirement age, otherwise insurance fraud is possible;

• the key specialist must have a labor agreement with the employer, which clearly specifies his professional duties and the term of employment, as the dismissal or voluntary withdrawal of the insured will formally satisfy the definition of the insured event, which increases the risk of insurance fraud;

• You should receive an indirect confirmation of the importance of this employee for the insured (for example, ask about his work experience or the existence of a contract of life insurance of the person paid by the employer).

To effectively organize such underwriting, additional information is required:

• about the employer (how long the enterprise was founded, what is the nature of the business, the company's staff, turnover and profit before tax for a certain period, for example, for the last 3 years, etc.);

• about the key employee (qualification, work experience in this specialty, salary and other charges for a certain period, for example, for the last 3 years, details of his employment contract, his participation in equity, etc.);

• about the specifics of the contract (size and timing of payments, special conditions).

Underwriting for accident insurance is discussed in the following example.

Practice questions

There was an application for insurance against accidents and illnesses of a family of 4 people: a husband, 40 years old; wife, 36 years old; son, 12 years old and a daughter, 8 years old, for insurance amounts -10 million rubles. for each member of the family. The study of the application showed that the husband works as the head of the site in a construction company and is fond of playing football, the wife is a doctor and regularly goes to the swimming pool, the children attend regular school, the son is engaged in judo, the daughter is dancing. The average annual income of the family for the last 3 years is 1 million rubles. In view of the significant overall insurance amount, the contract was transferred to individual underwriting. The underwriter suggested the following values ​​of the base tariff and correction factors.

Family member

Basic rate based on work,% insured amount

The age adjustment factor

Correction factor by type of leisure

Final tariff,% insured amount

Husband

0.40

0.9

1.5

0.540

Wife

0.25

0.9

1.0

0.225

Son

0.25

1.1

2.0

0.550

Daughter

0.25

1.08

1.0

0.270

In addition, the underwriter recommended reducing the insurance amount for children to 5 million rubles. or to introduce for them an unconditional franchise of 1 million rubles.

In order to reduce the risks of occupational diseases and work-related injuries, the underwriter, together with the insured, makes an action plan for the observance of safety procedures, a schedule of regular medical examinations, the introduction of safe technologies and equipment and other measures stipulated by the specifics of the insured's manufacturing process.

The economic incentive for the insured to implement such a plan can be a review of the size of the insurance premium in the direction of increase or decrease, depending on the fulfillment of the plan.

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