insurance fund- this is a set of natural and monetary reserves of a society intended to prevent and compensate for damage caused by natural disasters and emergency circumstances.
There are three types of organization insurance fund:
State centralized insurance (reserve) fund;
self-insurance fund;
An insurance fund formed by an insurance organization.
Formation state insurance fund produced in a centralized manner at the expense of national resources. The Fund can be formed both in kind and in cash. The purpose of its creation is to compensate for the damage caused by large-scale accidents, natural disasters, as well as the need to eliminate their consequences.
self-insurance fund has an organizationally isolated character, is formed at the expense of natural and cash reserves of economic entities. The purpose of the self-insurance fund is to ensure the smooth operation of the entity and its financial stability in adverse economic conditions.
Insurance fund of an insurance organization formed only in cash. Its creation is determined by a large number of participants (insurants) who pay insurance premiums. The funds accumulated in the insurance fund have a strictly designated purpose - the payment of indemnities and insurance amounts to fund participants in accordance with the rules and conditions of insurance. Inside the insurance fund, the loss of one of the participants is redistributed among all the remaining ones. When determining the required amount of the fund, the insurance company applies methods actuarial calculations, based on the operation of the law of large numbers and the theory of probability.
Based on the assumption that the risk transfer mechanism is implemented through the formation of an insurance fund, it can be concluded that the amount of the contribution paid to this fund should be fair for all its participants.
Each member of the fund who wants to transfer his risk to insurance brings in insurance company risks of varying degrees. For example:
· wooden house may pose a greater danger than a house with a brick structure;
· An 18-year-old driver poses a greater risk than a 35-year-old; two 35-year-old drivers, one with a family car and the other with a sports car, will also contribute different risks to the fund;
An overweight person is more likely to die early than an average weight person.
• a manual worker is more at risk of injury than an office worker.
Based on the above, the following conclusions can be drawn:
1. Contributions to the insurance fund must be sufficient to pay potential compensation in the event of a loss, as well as correspond to the size of the danger and the value of the property and other risk factors.
2. Insurance premiums must cover the administrative costs of managing this fund, be sufficient to form reserves from which extraordinary losses are covered in unfavorable years, and also guarantee the insurance company a certain rate of return.
When setting the size insurance premium it is necessary to take into account the above two principles, and also it is necessary to make sure that the contribution to the insurance fund of each particular polyholder should be comparable with the contributions of others, taking into account the severity and frequency of their risks. In addition, the level of contributions should allow competition in the marketplace.
7. Insurance intermediaries, their tasks and functions.
Concept of insurance intermediaries. As a link between the insured and the insurer on insurance market can act insurance agents and insurance brokers, who are engaged in the promotion of insurance services as a product from the insurer to the insured. Organizationally, insurance intermediaries can function as partnerships or private entrepreneurs. Sometimes agents act as employees of insurance companies or their proxies under a surety agreement. Insurance intermediaries are persons who are closer to the insured and respond more quickly to changes in the market conditions of insurance services. The activities of insurance brokers and agents are usually regulated by national law.
The Russian civil legislation contains definitions of intermediaries in the insurance services market. So, according to paragraph 1 of Art. 8 of the Law of the Russian Federation of November 27, 1992 No. 4015-1 "On the organization of insurance business in Russian Federation» insurance agents - these are individuals or Russian legal entities permanently residing in the territory of the Russian Federation and carrying out their activities on the basis of a civil law contract ( commercial organizations), who represent the insurer in relations with the insured and act on behalf of the insurer and on his behalf in accordance with the powers granted. According to the norm of paragraph 2 of the same article insurance brokers - these are those permanently residing on the territory of the Russian Federation and registered in accordance with the procedure established by the legislation of the Russian Federation as individual entrepreneurs individuals or Russian legal entities (commercial organizations) that act in the interests of the insured (reinsurer) or the insurer (reinsurer) and carry out activities to provide services related to the conclusion of insurance (reinsurance) contracts between the insurer (reinsurer) and the insured (reinsurer), as well as with the execution of these contracts. When providing services related to the conclusion of these contracts, the insurance broker is not entitled to simultaneously act in the interests of the insured and the insurer. Insurance brokers have the right to carry out other activities related to insurance not prohibited by law, with the exception of activities as an insurance agent, insurer, reinsurer. They also do not have the right to carry out activities not related to insurance (clause 2, article 8 of the Insurance Law). The activities of insurance agents and insurance brokers for the provision of services related to the conclusion and execution of insurance contracts (with the exception of reinsurance contracts) with foreign insurance companies or foreign insurance brokers are not allowed on the territory of the Russian Federation (clause 3, article 8 of the Insurance Law).
Thus, the organizational difference between insurance agents and insurance brokers is as follows. Insurance agents are representatives of insurance companies and act on the basis of their powers. In international practice, insurance agents are both separate legal entities or individuals, as well as persons employed by an insurance company (working for employment contract). An insurance agent may represent one or more insurance companies and, under the terms of the contract with them, acts only on behalf of these companies. insurance broker - it is an independent natural or legal person acting on the instructions of the insured (in direct insurance) or the insurer (in reinsurance). Often, brokers are independent firms with their own capital and branches. They have complete freedom of action in relation to insurance companies. Their main task is to assist policyholders, insurers and reinsurers in concluding contracts. Brokers prepare the conditions for the conclusion of such contracts and assist in their conclusion, as well as take part in the procedures for the liquidation of losses. On behalf of insurance companies, brokers can conclude insurance contracts on their behalf, which are then to be replaced by insurance policies. In a number of countries, both brokers and agents require a special license to conduct insurance operations, confirming their professional training.
Brokers as subjects of the insurance services market. The main function of a broker is to serve and protect the interests of its clients - the insured or the insurer. The broker finds clients of his choice, but, having found them, he acts on behalf of the client according to his instructions, since he is primarily responsible to his client. In particular, the broker informs the insurer about the interests of his client-insured and, if necessary, explains them, which is reflected in the policyholder's application for insurance, which is submitted to the insurer. Then the broker receives on the market the most acceptable insurance premium rates for the client and agrees on the terms of insurance. Upon completion of the placement of the risk, the broker informs his client about this and presents cover note - a special document confirming the placement of the risk, indicating the premium rates, insurance conditions and the list of insurers who have subscribed to the insurance of this risk. After that, the broker provides its client with services in paying the insurance premium and receiving insurance compensation.
The broker's relationship with the insurer should be based on the principle of "due care", that is, his actions should be honest and he should not hide anything from the insurer. The broker is obliged to provide the insurer with all available information to enable the latter to properly assess the degree of risk. After the conclusion of the insurance contract, the broker continues to be liable to the insurer for money turnover. Having received a premium from a client, the broker must, within a reasonable time and within the period of payment of the premium, specified in slipe - a special document reflecting the mutual obligations under the insurance contract - to transfer it to the insurer.
The task of the broker is to facilitate the proper fulfillment of the terms of the contract by the parties. As an independent person, the broker is not a party to the contract and, according to the common civil law on intermediaries, he is liable only for gross negligence and fraud.
The main functions of insurance agents are - preparatory work and the conclusion of insurance contracts on behalf of the insurer, and the agent acts strictly within the powers granted to him by the insurance company. However, the functions of the agent, of course, are not limited to signing the contract on behalf of the insurer. The range of services they provide is much wider:
1) provision of information about the insurance company to policyholders;
2) advising policyholders on issues of insurance carried out by an insurance company; explanation to policyholders of the possibilities of concluding an insurance contract with various conditions and assistance in choosing the best option contracts to maximize coverage insurance risk and minimizing the costs of insurers to recover losses;
3) sale of insurance services to the insured - signing the insurance contract on behalf of the insurance company;
4) providing the insurer with accurate information about the risks accepted from the insured in order to regulate tariffs;
5) servicing the insured insurance contract after its conclusion.
The insurance agent acts as an attorney of the insurance company and performs the actions entrusted to him on behalf and at the expense of the insurer. The rights and obligations arising from the actions performed by the insurance agent, in accordance with the contract concluded by him with the insurance company, are acquired by the insurance company (principal). Since the insurance agent acts at the expense and in the interests of the insurance company, he is obliged to execute instructions strictly in accordance with its instructions.
An insurance agent may be a natural or legal person who, on behalf of and on behalf of an insurance company, is engaged in the conclusion of insurance contracts (sales of policies), draws up insurance documentation, and in individual cases pays insurance compensation (within the established limits), collects the insurance premium. The relationship between insurance agents, policyholders and insurance companies is based on contract basis, where the rights and obligations of the parties are stipulated.
There are three forms of organizing an insurance fund:
State centralized insurance (reserve) fund.
The centralized insurance (reserve) fund is created both in kind and in cash at the expense of national funds. The purpose of this fund is to compensate for damage and eliminate the consequences of natural disasters and major accidents that caused major destruction and great loss of life. This fund in kind is a constantly renewable stock of products, materials, raw materials, fuel, food according to a certain nomenclature. These are strategic reserves that are under the control of the state. The centralized insurance fund in cash is the centralized state financial reserves. The prerogative to dispose of them belongs to the state.
The problems of production safety and environmental protection from the harmful effects of the technosphere pose new challenges for man. Growth in scale and concentration of production lead to the accumulation of sources of potential danger. Through the insurance fund built into the structures of the national economic complex, certain guarantees of mobility and flexibility are achieved. economic mechanism, opportunities to eliminate or limit man-caused risk factors.
In natural form, it is a constantly renewable stock of products, materials, raw materials, fuel, food according to a certain nomenclature, placed on special bases. These are strategic reserves, everything that is related to strategic reserves is a state secret, which are under the jurisdiction of the State Committee of the Russian Federation for State Reserves. The centralized insurance fund in cash is the centralized state financial reserves that are the property of the state. The prerogative to dispose of them belongs to the government. The resources of the national centralized insurance fund were attracted, for example, to eliminate the consequences of the accident at the Chernobyl nuclear power plant, the earthquake in Armenia, and others. The problems of production safety and environmental protection from the harmful effects of the technosphere pose new challenges for humans. Growth in scale and concentration of production lead to the accumulation of sources of potential danger. Through the insurance fund built into the structures of the national economic complex, certain guarantees of mobility and flexibility of the economic mechanism, the ability to eliminate or limit technogenic risk factors are achieved.
self-insurance fund.
The self-insurance fund, as a rule, is a decentralized, organizational-separate fund, mainly in the form of natural reserves of an economic entity. At the same time, the monetary form of the self-insurance fund is also possible, i.e. reserve funds are created to cover losses. The self-insurance fund makes it possible to overcome temporary difficulties in the production process. When moving to market economy the boundaries of self-insurance are expanding significantly. His new model is transformed into a risk fund, which is created by state-owned enterprises and firms, joint-stock companies to ensure their activities in an unfavorably developing economic environment. It is created in case of delay by customers in due payments for delivered products, lack of working capital, etc. In market conditions, enterprises operate in an unstable and constantly changing environment. economic environment changes in prices for manufactured products, purchased material resources, conditions for obtaining bank loans, the ratio of supply and demand, other factors economic activity. At the same time, through the self-insurance fund, business entities seek to ensure sustainable development, the ability to work without financial and production disruptions.
An insurance fund formed by an insurance organization.
The insurance fund of the insurer is created by a large circle of participants in enterprises, institutions, organizations and individuals. Members of this fund, shareholders and users, act as policyholders. The formation of the fund takes place only in a decentralized manner, since insurance premiums are paid by each participant by the insured separately. In modern conditions, the insurance fund of the insurer has only a monetary form.
The fund's resources are spent for specific purposes to compensate for damages and pay insurance sums in accordance with the rules and conditions of insurance established by insurers. The amount of the Fund's financial resources required for the payment of insurance indemnity and sums insured is determined on the basis of statistics, empirical forecasts and probability theory. The greater the number of participants in the fund, the more reliable will be the indicators that determine the amount of its financial resources.
Within the framework of the insurance fund of the insurer, a very high efficiency of the use of available funds is achieved. Losses in this case, as it were, are spread out among all participants in the insurance fund, there is a significant redistribution of funds, which ultimately leads to greater maneuverability and turnover. The social nature of the insurance fund reflects its real material content.
The insurance fund of the insurer implements the collective and personal interests of its participants, reflects the relationship between the social positions of the participants economic activity and their economic behavior, motivations and stereotypes.
The public nature of the insurance fund of the insurer requires the appropriate public nature of its management. In other words, it is necessary to organize insurance relations between the participants of the insurance fund on a directly public basis through insurance institutions, insurance companies or insurance companies.
Each insurance institution, in the operational management of which the insurance fund is transferred, on the one hand, is called upon to solve the problems of insurance interests existing in society, and on the other hand, it must have the necessary material, financial and human resources to perform these tasks.
LECTURE COURSE
Module 1 General principles insurance
Topic 1.1: ECONOMIC CONTENT OF INSURANCE
Topic outline
1. Economic necessity, functions, role of insurance in the conditions of market relations
2. The concept of an insurance fund
3. Classification of insurance
4. Basic concepts and terms of insurance
Economic necessity, functions, role of insurance
In the conditions of market relations
Insurance represents economic relations for the protection of property rights of legal and individuals upon the occurrence of certain events at the expense of monetary funds formed from the insurance premiums paid by them.
The transition to the market has expanded the scope of insurance services, the commodity producer begins to act at his own peril and risk, according to his own plan, therefore, the role and importance of insurance is increasing. In a market economy, insurance acts, on the one hand, as a means of protecting business, and on the other, as an income-generating activity.
Main character traits inherent in insurance are as follows:
1. The main source of formation of the insurance fund is the contributions paid by all its participants.
2. Collected funds are concentrated in organizations carrying out insurance operations (insurance organizations).
3. The amount of contributions to be paid is determined according to special standards, depending on the probability of occurrence of the event in respect of which insurance is carried out, and the amount to be paid in the event of its occurrence.
4. The funds of the insurance fund, with the exception of expenses for the implementation of insurance activities (for example, for the payment of personnel of an organization that conducts insurance, for the acquisition or lease of property, etc.), are used to pay only to participants in the creation of an insurance fund, or to those persons for insurance interests of which participants have paid contributions. This means the isolation of insurance relations.
5. Funds from the insurance fund are paid out only upon the occurrence of events agreed in advance at the conclusion of the insurance contract. At the same time, at the time of conclusion of the contract, it should not be known whether such an event will occur or not, and its occurrence should not be the result of illegal actions of persons in respect of which insurance is carried out.
6. The right to receive payment from the insurance fund arises, as a rule, only if the event in respect of which insurance is carried out occurs within a predetermined period of time.
Insurance performs the following main functions:
1) Function formation of specialized funds cash means the creation of insurance funds as a payment for the risks that insurance companies take on. At the expense of insurance premiums, insurance and reserve funds are created that ensure the stability of insurance, the guarantee of payments and compensation.
2) Function in damages indicates that through the insurance mechanism a significant proportion of losses incurred as a result of fires, natural disasters, man-made disasters and other random events of an unfavorable nature are compensated.
4) Investment function insurance is manifested in the investment of insurance funds in the development of various sectors of the economy. With the help of long-term investments in profitable enterprises, you can protect against inflation or even increase financial resources insurance organizations.
5)Warning functioninsured event and minimizing damage. Such measures on the part of the insurer are called preventive, their financing is carried out from a special monetary fund for preventive measures, created on the basis of deductions from insurance payments in order to prevent the onset of certain adverse circumstances.
The role of insurance in the country's economy is:
Reducing the risk of an adverse outcome business transactions;
economic stability due to compensation for possible losses and losses;
participation temporarily free funds insurance funds in the investment process;
Replenishment of the revenue part of the budgets of all levels budget system RF at the expense of part of the profits of insurance organizations, etc.
The concept of an insurance fund
insurance fund is a specially formed in material or monetary form of reserves, which are intended to compensate for losses arising from the impact of adverse events of a random nature.
There are three types of insurance funds:
1. Centralized- is created at the state level at the expense of national resources both in kind and in monetary terms. Its main purpose is to compensate for damage and eliminate the consequences of natural disasters, major accidents, catastrophes, and terrorist attacks. In natural form, these are constantly renewable stocks of materials, fuel, food, which are located at special bases. These are the country's strategic reserves, which can only be disposed of by the RF State Committee for State Reserves. In monetary terms, these are state centralized financial reserves, the right to dispose of which belongs to the government of the Russian Federation.
2. Decentralized (Self-Insurance Fund)- is created in physical and monetary terms at the level of the enterprise in order to overcome temporary difficulties in production, to ensure continuity of operations under adverse circumstances. AT in kind- seed, fodder funds, fuel and lubricants fund, etc. In monetary form - reserve capital, which is formed by deductions from net profit.
3. Insurance fund of the insurer(insurance company) - is created by a large circle of participants in the insurance process - enterprises, institutions, citizens who act as insurers and form this fund at the expense of paid insurance premiums. It has only a monetary form and is formed decentralized. The amount of the Fund's financial resources required for the payment of indemnities and sums insured is calculated on the basis of probability theory and statistics. The fund's resources are spent only on compensation for damage and payment of sums insured in accordance with the insurance contract.
Rice. 8.2. Composition of insurance reserves
Each type of insurance reserve serves to solve its own task, but all of them are united by a common goal - to ensure payments and solvency of the company.
An unearned premium reserve is necessary when the cost of risk is unevenly distributed during the term of the contract due to the seasonality of the occurrence of insured events, inflation or any other reasons. In this case, it becomes necessary to bring the size of the reserve into line with the value of the company's liabilities.
The reserve for reported but unsettled losses takes into account inflation during the settlement period, real investment income for the same period, the inadequacy of the claims at the time of their presentation of the real cost of damage.
The reserve for incurred but unreported losses involves the calculation of a forecast of the size of the company's liabilities that have already arisen, but which are not yet known.
The catastrophe reserve takes into account the predicted consequences of a catastrophic event, which, if it occurs, will significantly increase the obligations of the insurance company under a contract or group of contracts.
The loss fluctuation reserve implies the need to forecast a possible increase in payments, which may be caused by the onset of the most probable events.
Insurance reserves should be limited to the type of insurance for which the license is issued. Otherwise, the carriers of some risks will be financed at the expense of others.
There are many types of insurance, so their classification is necessary. It can be carried out according to different criteria.
According to the goals of insurance activities, two areas are distinguished - commercial and non-commercial insurance. Non-commercial insurance includes social insurance, mandatory health insurance and etc. Commercial insurance includes primary or direct insurance, coinsurance, reinsurance.
According to the levels of protection of workers, insurance against industry risk, enterprise risk and individual risk (at the expense of citizens' own funds) are distinguished.
By industry, insurance is divided into:
*personal insurance - the object of insurance: the life and health of citizens; Property insurance - object: Inventory and material assets and property interests insured transport insurance, housing;
* insurance of economic risks - object: all kinds of risks (risk of loss of profit, insurance of mortgage operations, insurance against losses due to fluctuations exchange rate, risks on new technologies); liability insurance - object: the interests of the insured himself and third parties who are guaranteed payments for damage due to the action or inaction of the insured (insurance civil liability vehicle owners); in international practice - insurance of professional activity of lawyers, doctors.
According to the volume of insurance liability, compulsory and voluntary insurance are distinguished. To compulsory insurance includes insurance of passengers, police officers, foreign intelligence, military personnel, employees tax inspections and tax police, astronauts.
According to the class of insurance, fire, transport, engineering insurance is distinguished.
According to the form of organization of the insurance business, insurance is divided into group and individual.
According to the orientation of insurance interests, family-oriented insurance and insurance of business structures are distinguished.
Business risk insurance includes insurance in case of non-receipt of profit, decrease in profitability, formation of losses; in case of non-payment on the invoices of the supplier of products; lost profits on failed transactions; from equipment downtime.
According to the form of insurance organization: state, cooperative, joint-stock, mutual.
Insurance relations arise between the insurer and the insured upon the occurrence of certain events (insured event). The sum insured is calculated according to one of the insurance systems: Insurance based on the actual value of the property. Proportional liability insurance. This is incomplete, partial insurance of the object, and in this case the amount of insurance compensation is reduced in proportion to the share of the sum insured in the actual value of the object. Insurance under the first risk system, in this case, the insurance indemnity is paid in the amount of damage, but within the sum insured. Damage in excess of the sum insured is not paid at all. The system of the fractional part, while the insurance contract establishes two sums insured:
*shown value; Actual value.
For the shown value, the policyholder receives compensation expressed as a percentage or natural fraction. The liability of the insurer is limited to the size of the fractional part. If the value shown is equal to the actual value, then the insurance of the fractional part turns into insurance under the first risk system. If the value shown is less than the actual value, then the insurance of the fractional part turns into insurance under the proportional liability system. Replacement cost insurance - in this case, the insurance indemnity is equal to the price of a new property of the corresponding type. Of course, insurance premiums will also be higher than with other insurance systems.
Franchise is often used in insurance contracts.
A deductible is a part of losses stipulated by the terms of insurance that is not subject to compensation by the insurer.
The deductible is the personal participation of the insured in covering the damage. The deductible is set in rubles or as a percentage of the sum insured or damage. The franchise is beneficial to both the insured and the insurer. The insured receives discounts from insurance rate, and the insurer transfers part of the damage to the insured. There are two types of franchise - conditional and unconditional.
A conditional (non-deductible) deductible means that the insurer is released from liability for damage if it does not exceed the deductible percentage. If the damage is greater than the deductible, then the insurer is obliged to compensate the damage in full. If there is a conditional deductible, the entry “Free from ... interest” is made in the insurance contract.
An unconditional (deductible) deductible means that the insurance indemnity is always equal to the damage minus the unconditional deductible. If there is an unconditional deductible, the entry “Free from the first ... percent” is made in the insurance contract.
An insurance fund is a set of natural and monetary reserves of a company intended to prevent and compensate for damage caused by natural disasters and emergency situations.
There are three forms of insurance fund organization: -state centralized insurance (reserve) fund; - self-insurance fund; - an insurance fund formed by an insurance organization.
The formation of the state insurance fund is carried out in a centralized manner at the expense of national resources. The Fund can be formed both in kind and in cash. The purpose of its creation is to compensate for the damage caused by large-scale accidents, natural disasters, as well as the need to eliminate their consequences.
The self-insurance fund has an organizationally separate character, it is formed at the expense of natural and cash reserves of economic entities. The purpose of the self-insurance fund is to ensure the uninterrupted activity of the subject and its financial stability in adverse economic conditions.
The insurance fund of an insurance organization is formed only in cash. Its creation is determined by a large number of participants (insurants) who pay insurance premiums. The funds accumulated in the insurance fund have a strictly designated purpose - the payment of compensation and insurance amounts to fund participants in accordance with the rules and conditions of insurance. Inside the insurance fund, the loss of one of the participants is redistributed among all the remaining ones. When determining the required amount of the fund, the insurance organization applies actuarial calculation methods based on the operation of the law of large numbers and the theory of probability. Based on the assumption that the risk transfer mechanism is implemented through the formation of an insurance fund, it can be concluded that the amount of the contribution paid to this fund should be fair for all its participants.
Each member of the fund who wants to transfer his risk to insurance brings risks of varying degrees to the insurance company. For example: a wooden house may pose a greater risk than a brick structure; an 18-year-old driver poses a greater risk than a 35-year-old; two 35-year-old drivers, one with a family car and the other with a sports car, will also contribute various risks to the fund; an overweight person is more likely to die early than an average weight person; a manual worker is more at risk of injury than an office worker.
Based on the foregoing, the following conclusions can be drawn: Contributions to the insurance fund must be sufficient to pay potential compensation in the event of a loss, and also correspond to the size of the danger and the value of the property and other risk factors. Insurance premiums must cover the administrative costs of managing this fund, be sufficient to form reserves from which extraordinary losses are covered in unfavorable years, and also guarantee the insurance company a certain rate of return. When setting the amount of the insurance premium, it is necessary to take into account the above two principles, and it is also necessary to make sure that the contribution to the insurance fund of each particular polyholder should be comparable with the contributions of others, taking into account the severity and frequency of their risks. In addition, the level of contributions should allow competition in the marketplace.
There are three forms of organizing an insurance fund:
With the insurance form of formation of insurance fund insurance, it is created at the expense of contributions from numerous legal entities and individuals who have expressed a desire to insure their possible damage from any unforeseen circumstances provided for in insurance contracts.
The insurance fund, formed in the country with the help of the insurance institution, is essentially a set of separate, local funds created by each of the insurance companies by collecting insurance payments (contributions) from a certain circle of persons, namely from their clients, insurers of this insurance company, and intended to compensate for damage to this particular limited circle of persons. As part of the monetary insurance fund, reserve funds and reserves can be distinguished
The insurance funds also include the fund for financing preventive measures to combat fires, livestock deaths, death and damage to agricultural crops, which is formed mainly from deductions from payments for property insurance, compulsory and voluntary types property insurance among the population, voluntary insurance property of cooperative and public organizations.
The reserve fund is formed from the balances of the payout fund for risky types of insurance, which are determined as the difference between the standard of payments established by the insurance organization and the actual level of payments. Reserve funds in insurance are represented by funds of funds intended for the payment of insurance indemnity and sums insured in cases where these payments are not covered by insurance payments of the current year. These funds for risky types of insurance can also be replenished at the expense of deductions from profits from insurance operations. The main source of profit is the gross rate. In addition, profit can be obtained by reducing the unprofitability of the sum insured for a particular type of insurance in favorable years, as well as by a relative reduction in the cost of insurance operations compared to the level of unprofitability or overhead costs included in insurance rates. Reserve funds can be kept in the bank on settlement and deposit accounts, as well as placed in short-term investments.
The depreciation fund includes depreciation deductions for full restoration and capital investments at the expense of depreciation deductions and are shown in the volume of limits allocated for the insurance company, and on overhaul- in the amount of depreciation deductions for the planned year. Depreciation deductions intended for capital investments are directed to replenish the fund for production and social development.
The statutory fund may be represented by real estate and other material values, securities rights to use land, water and other natural resources buildings, structures, equipment, and other property rights(including intellectual property) in cash in rubles and foreign currency.
The authorized capital is intended to ensure the authorized activity of the enterprise and can be used to cover the costs of insurance payments in case of a lack of insurance reserves and current receipts of insurance premiums. The authorized capital is formed in the manner and amount determined by the current legislation and constituent documents. In order to ensure the financial stability of Russian insurers, there is a requirement according to which, for companies just starting their activities, the paid-in authorized capital and other own funds should have taken together a certain amount, differentiated depending on the type of operations carried out. In addition to contributions from shareholders, reserves can be created at the expense of the owners of enterprises that deduct funds to the insurer in an amount exceeding the authorized capital. Deductions from profits received as a result of the insurer's own activities, which were subject to taxation, are also used to replenish the reserve fund.
