Classification of insurance industries - Finance, money circulation and credit

Classification of insurance industries

In accordance with Federal Law No. 157-FZ of December 31, 1997, "On the Organization of Insurance in the United States" the whole set of insurance relations can be divided into three branches: personal, property insurance, liability insurance. Such a classification is determined by the list of objects and the risks that are subject to insurance.

Personal insurance is an insurance industry where the life, health and working capacity of a person are used as insurance objects. Personal insurance includes life insurance and accident insurance, combines risky and savings functions, including through the issuance of loans secured by an insurance policy.

Life Insurance is related to the interest of the insured (insured) in receiving the insurance payment:

- when the policyholder survives (the insured person) before the end of the insurance period or the age specified in the insurance contract;

- in case of death of the insured (insured).

The insured risk in life insurance is the duration of human life. Life insurance contracts are based on the life of a particular person - the insured life. Therefore, at the very beginning of the negotiations, a person whose life is to be entered into a contract must be named, and the risk of death during the duration of the contract is assessed. In such contracts, the concept beneficiary - this is the individual appointed to receive the insured amount, if an insured event occurs.

Life insurance offers a wide range of insurance guarantees to investment services, solves social and financial goals. With insurance against accidents and health insurance, there is no provision for the occurrence of the insurer's obligation to pay the insurance amount at the end of the insurance period and the survival of the insured person up to the time limit specified in the insurance contract. Insurance payments in these types of insurance are associated with specific circumstances in the life of the insured, relating to the damage to his life or health.

The main principles of life insurance are: the existence of insurance interest, participation in the profits of the insurance company, buying out an insurance policy and transparency.

Life insurance policies are divided into:

• by type of insurance object:

- life insurance;

- life insurance of another person

- Joint life insurance;

• depending on the subject of insurance:

- death insurance;

- life insurance;

- mixed insurance;

• in the order of payment of insurance premiums:

- life insurance with a one-time premium payment;

- with periodic premiums

- with premiums paid for a limited period of time less than the contract term;

- with premiums paid throughout life;

• in the form of insurance coverage:

- insurance for a fixed sum insured;

- insurance with a decreasing insurance amount;

- insurance with an increasing sum insured;

- an increase in the insured amount due to participation in the insurer's profit;

• by type of insurance payments:

- life insurance with a lump sum payment of the insured amount

- life insurance with the payment of annuities (annuity);

- life insurance with the payment of a pension.

The most important features of life insurance contracts:

- long-term character (10-15 years or the whole life of the insured);

- are a contract of insurance of the amount (and not of damage);

- there is no concept of "excessive insurance", there are restrictions on payments;

- Under the contract, the insurer knows in advance the value of the insured event and the probability of its occurrence (mortality table).

Accident insurance as a kind of personal insurance can be mandatory and voluntary. Compulsory insurance against accidents covers the risks of occupational injuries and occupational diseases. Insurance coverage in the event of an insured event guarantees:

- allowance for temporary incapacity for work;

- a one-time insurance payment;

- monthly insurance payments, the size of which is determined based on the amount of lost earnings, the degree of disability, the number of dependents in the family.

Payment of the sum insured is carried out to the insured person in the event of disability or family members in case of death of the breadwinner.

Insurance rates for accident insurance are calculated by the methods of risky types of insurance and do not depend on the sex and age of the insured.

Health insurance can be voluntary (LCA) and compulsory (CHI).

There are the following distinctions between compulsory and voluntary health insurance:

- LCA is not a social, but a commercial insurance area;

- VHI provides the opportunity to use medical services in excess of the prescribed standards;

- OMS is based on the principle of insurance solidarity, and LCA - on the principle of insurance equivalence.

The main objective of MHI is the collection and capitalization of insurance premiums and the provision of medical assistance to all categories of citizens at the expense of the collected funds under statutory conditions and guaranteed amounts.

VHI covers two groups of risks arising from diseases:

- the cost of medical services, the restoration of health, rehabilitation and care;

- the cost of loss of labor income during or after the disease in the event of disability.

Property insurance - the insurance industry, in which the object of insurance relations is property in various forms. Its economic purpose is compensation for damage that arose as a result of an insured event. The insured may be property, as being the property of the insured, and being in its possession, use, disposal. The insured act not only property owners, but also other legal entities and individuals responsible for its safety.

Property insurance includes insurance of means of land, air, water transport; cargo insurance; financial risk insurance.

Property insurance is intended to cover the following risks:

- loss, damage or partial loss of the insured property;

- failure to receive or less than expected earnings due to breach of obligations by partners or for other reasons (financial risks).

In property insurance, the ratio of the insured amount and insurance value is of great importance, under which there may be the following two options:

- the insurance amount is greater than the insured value. In this case, the insurer has the right to demand reduction of the insured amount to the amount of the insurance value subject to a proportional reduction of insurance premiums;

- the insured amount is less than the insured value. Here there is a lack of insurance: part of the damage remains on the account of the insured. This fact is fixed in the contract and is called the reservation of the asset.

Of great importance in property insurance are the facts of double insurance. Double insurance is the insurance of an object against the same risk in the same period in several insurance companies, provided that the sums insured together exceed the insurance value.

The contribution is the right of the insurance company to contact other insurance companies that are similarly liable to the insured, with a proposal to share the costs of damages. The contribution is calculated on the basis of the sum insured for each policy according to the principle of proportionality.

With liability insurance , the object is the liability to third (physical and legal) persons who may be harmed by any act or omission of the insured. Through liability insurance, the economic protection of the economic interests of potential harm-seekers is realized, which in each insurance case find their specific monetary expression. Liability insurance includes:

- insurance of civil liability of owners of vehicles;

- insurance of civil liability of the carrier;

- insurance of civil liability of enterprises - sources of increased danger;

- professional liability insurance;

- liability insurance for default of obligations;

- insurance of other types of civil liability.

Insurance companies provide insurance coverage on the basis of the liability insurance contract and the relevant rules approved by the control state body when issuing a license for insurance activities.

Under the contract, for liabilities arising as a result of harm to life, health of citizens or their property, as well as to property of legal entities, the risk of liability of the insured person himself or of another person to whom such responsibility may be entrusted may be insured.

The peculiarity of liability insurance for causing harm is that when an insurance contract is entered into, the person in whose favor such an agreement is concluded is most often unknown, since it can not be known in advance who will be harmed by the insured. Such a person may be known in advance only with insurance of liability for non-performance of contractual obligations.

The contract is considered concluded in favor of persons who may be harmed (beneficiaries), even if this contract is concluded in favor of the insured or other person responsible for causing harm. The contract specifies a specific list of insured events that may cause damage to third parties and are included in the insurer's liability, and stipulates cases of damage for which the insurer is not liable.

The insurance event for liability insurance is an accidental event that occurred during the performance of the insured activity and entailed the duty of the policyholder based on legal provisions to compensate for the damage inflicted on the person or property of third parties during the validity period of the insurance contract and that resulted from unintentional guilty actions of the insured , confirmed by the fact of presenting to the insured property claims. The insurer's liability for the insured event can be established by the judicial authorities, but may be voluntarily recognized as the causative agent of the damage.

Insurance coverage covers physical and property damage only if the relevant claim or claim for damages is presented in writing to the insured during the limitation period.

Insurance cover includes:

- satisfaction of reasonable, i.e. subject to reimbursement in accordance with applicable civil law requirements;

- the necessary and appropriate costs for the preliminary clarification of the circumstances and the degree of guilt of the insured;

- the costs of conducting cases in the judicial bodies for alleged insured events;

- necessary and expedient expenses for saving lives and property of persons who suffered damage as a result of an insured event, or reduce the damage caused by an insured event.

The peculiarity of liability insurance is the procedure for determining the insurance amount in the contract, which is often called the liability limit. The term liability limit practically does not matter, different from the term "insurance amount", but it is actively applied in the legislation and insurance practice of many countries. Unlike property insurance, where the insured amount is usually determined by the insurance (real) value of the property or its part, in case of liability insurance, the parties establish in the contract the maximum amount of compensation - the limit of the insurer's liability assumed by the insurer, which may arise when the latter causes damage (losses ) to third parties.

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