Licensing of US insurance operations, Conditions for licensing...

3.4.3. Licensing of insurance operations of the United States

Terms of licensing of insurance, reinsurance and insurance brokering

The activities of insurance entities, other than insurance actuaries, are subject to licensing. This means that the right to carry out activities in the field of insurance is provided only to the subject of the insurance business that received the license. In all countries where state regulation of insurance activities is carried out, obtaining a license is a prerequisite for admission to the insurance market.

The license for carrying out insurance activities is a document certifying the right of the insurer or insurance broker to carry out activities related to insurance and (or) reinsurance.

The license is issued for the implementation of insurance, reinsurance, mutual insurance, insurance brokering.

The license specifies the types of insurance that the insurance organization has the right to carry out. Classification of types of insurance is given in Art. 32.9 of the Law on Organization of Insurance.

The license is issued without an expiration date. The following are the exceptions:

- when the insurer does not have the information allowing to reliably estimate the insurance risk;

- if the insurer himself has determined the term of the license.

And in the first and second cases, the term of the temporary license is set from one to three years. The term of the temporary license may be extended at the request of the insurer. In the extension of the period of validity of the temporary license may be denied if for the time of its operation violations of the insurance legislation have been established that are not eliminated in due time.

The state establishes the criteria that the license applicant must meet to receive it. These include:

- the competitor of a license for insurance and reinsurance operations must have paid authorized capital in accordance with the current legislation (Article 25 of the Law on Organization of Insurance Business);

- the amount of the capital of the license applicant for the insurance and reinsurance operations should be sufficient to ensure its solvency;

- the head, chief accountant and other persons of the license applicant, determined by law, must meet the qualification requirements, etc.

The licensing of the activities of the subjects of insurance business in the United States is carried out on the basis of their applications and documents submitted in accordance with the list indicated in Table. 3.12.

License applicants who are subsidiaries in relation to foreign investors (main organizations) or having a share of foreign investors in their authorized capital more than 49%, in addition to the specified documents, are presented in accordance with the legislation of the country of residence of foreign investors, consent in written form of the relevant body for the supervision of insurance activities of the country where foreign investors participate in the authorized capitals of insurance organizations, or notify the insurance supervisory authority that there is no requirement for such a permit in the country of residence of foreign investors.

Table 3.12. List of documents for licensing

Document title

Licensing for the first time

Licensing of additional types

operations

Insurance

operations

Reinsurance

operations

reciprocal

Insurance

insurance brokerage activities

Constituent documents of the license applicant

+

+

+

For a legal entity

-

The document on the state registration of the license applicant as a legal entity or sole proprietor (only for the broker)

+

+

+

+

-

Minutes of the meeting of founders on approval of constituent documents of the license applicant and approval of the sole executive body, head (heads) of the collegial executive body of the license applicant

+

+

-

-

-

Information on the composition of shareholders (participants)

+

+

-

-

-

Documents confirming payment of the charter capital in full

+

+

-

-

-

Documents on state registration of legal entities that are founders of the subject of insurance, an audit report on the reliability of their financial statements for the last reporting period, if mandatory audit is for such persons

+

+

-

-

-

Information on the sole executive body, the head (s) of the collegial executive body, the chief accountant, the head of the auditing commission (auditor) of the license applicant

+

+

+

-

-

Information on the insurance actuary

+

-

-

-

-

Insurance rules by types of insurance, with the application of samples of used documents

+

samples of used documents

+

-

+

Calculations of insurance tariffs with the application of the method used for actuarial calculations and the source of the source data, as well as the structure of tariff rates

+

-

-

-

+

Regulation on the formation of insurance reserves

+

+

+

-

+

Economic justification for the implementation of types of insurance

+

+

-

-

+

Samples of contracts necessary for the implementation of insurance brokering activities

-

-

-

+

-

Documents confirming the qualification of insurance broker employees and qualification of an insurance broker - individual entrepreneur

-

-

-

+

-

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