7insurances

The main feature of the fundamental organization of insurance business in the modern period (in contrast to the Soviet period) is its de-monopolization and competition of insurance companies. Along with the state insurance emerged and developed private insurance. Competition, which usually refers to the voluntary insurance.

The competition encourages insurance companies to develop and introduce new types of insurance, constantly improve them, expand the range and cover additional segments of the insurance market. In conducting the same kinds of insurance competition between insurance companies is expressed in the establishment of suitable forms of contract and payment of insurance premiums, reduced tariff rates, prompt payment of insurance compensation and insurance coverage.

Competition in all areas - the main condition for the transition to a market economy. However, insurance - a special kind of activity designed to provide insurance protection to individuals and legal entities. It is therefore important to organize insurance, that insurance companies are not ruined, did not cease their activities. This is accomplished by special methods of state regulation of insurance activities, as well as the development of a clear legal and economic foundations of insurance. Hence the second principle - the need for state regulation of insurance activities, based on a solid legal and economic foundations.

Competition in the insurance, the inherent competition, can not be regarded as an absolute category. In many cases, especially when taking large risks insurance, requires the cooperation of insurers. This cooperation takes the form of coinsurance and reinsurance. An important principle of organization of insurance as part of international economic relations, international cooperation is in the field of insurance, which is caused by an objective necessity in terms of deepening and expanding economic relations. Thus, the cooperation of insurance companies both domestically and abroad is also an important principle of organization of insurance business.

The economic essence of insurance is to provide insurance protection. Insurance protection can be explained as a two-sided reaction of mankind to the possible danger of natural, technological, economic, social, ecological and other descent. On the one hand, the insurance cover is called an objective requirement of natural and legal persons in maintaining their property interests associated with different aspects of life. On the other hand, this need is accompanied by a corresponding ability of people to ensure the above interests.

If the need for protection is generated by fear, and the ability to protect the knowledge because of this fear, the need for appropriate natural or monetary funds with which to ensure the safety of property, personal and other interests of the people, then we can say that will take effect the system of insurance protection.

Therefore, insurance protection can be defined as the perceived needs of individuals and entities to establish special insurance fund for the restoration of property, health, disability and personal income as the participants in the creation of these funds, and third parties.

Public practice over a long period of time has developed three basic forms of organization of the insurance fund:

    1. Centralized insurance (reserve) fund set up by budgetary and other public funds. Formation of such funds is carried out both in kind and in cash. National Insurance (Reserve) Funds are available to the government.
    2. Self-as a system of creation and use of insurance funds, economic entities and individuals. These decentralized insurance funds are in-kind and cash. These funds are intended to overcome the temporary difficulties in the activities of a specific producer or person. The main source of decentralized funds are the proceeds of insurance company, or individual.
    3. Actually insurance as a system of creating and using the funds of insurance companies by premiums for insurance of the parties concerned. The use of these funds is carried out to recover damages incurred in accordance with the terms and conditions of insurance.

At present, substantially changes the ratio between centralized, decentralized funds and funds of specialized insurance companies. The shift occurs in the direction of strengthening the role of insurance.