The insurance market is represented by insurance companies, their customers, agents and brokers, beneficiaries and insured persons. However, you should know that the subjects of insurance are not all of its participants. Indeed, many other specialists are involved in such a specific market, with which clients of insurance companies do not encounter at all or learn about their profession only upon the occurrence of a case specified in the contract. Who is a participant in the insurance market, and who is the subject of the insurance business - should be sorted out.
Insurance Participants
The financial market covers all spheres of life as a simple layman, and organizations, institutions, industrial enterprises. Insurance is part of the non-banking sector of the country's economy and is actively used by the state as a means of accumulating cash reserves and the ability to reduce losses from unforeseen situations and disasters. Taking into account the provisions of the current legislation, financial services are provided by insurance companies and insurance companies in accordance with the obtained licenses.
Ordinary citizens, private entrepreneurs, industrial enterprises, public organizations, companies of various types of ownership use the services of insurers. They conclude insurance contracts for voluntary and compulsory types. During the conclusion of agreements, clients act as policyholders and also insured persons. Often, personal and property insurance contracts indicate beneficiaries who have the legal right to receive insurance compensation when unforeseen events occur.
Insurance agents and insurance brokers, actuaries and emergency commissioners are also part of the insurance market. They search for potential customers for insurance companies and sell policies. Also, the participants of the insurance market should include state regulatory authorities, various associations of insurers, brokers.
Subjects of insurance
It should be understood that not all participants in the insurance market are its subjects. Therefore, for a clear distinction, it is necessary to focus on the current legislation regarding this sphere of economic activity.
Based on its standards, the subjects of insurance in the Russian Federation are directly insurers, agents and insurance brokers, emergency commissioners and actuaries. All other parties that participate in insurance contracts or exercise control over the insurance process are legally assigned to participants in the insurance business. Thus, the subjects of insurance are participants for whom insurance is the main type of economic activity.
Insurance company
The key subjects of insurance are financial companies that professionally provide insurance coverage in accordance with agreements concluded with customers. They are the basis for the full functioning and further development of this sector of the economy.
An insurance company must be registered as a legal entity. The insurance company provides services based on permits received. The activities of such financial companies are regulated by their charter and legislative documents. The insurer may offer clients protection contracts in case of unforeseen situations, which are prescribed in the document.
Insurance companies take under their responsibility the property of policyholders, their responsibility for causing possible losses during the operation of transport or the transport of dangerous goods, life and health in the event of an accident.
Mutual Insurance Companies
It is not true in advance that the insurance entities are insurance companies that are represented as legal entities operating on the basis of licenses received, and only they are. Mutual insurance societies, which legislatively have a different organizational form, also fall under the definition of “subject”. Such societies are created by individuals and commercial organizations. They invest combined financial resources and thus protect the property interests of members of such a society.
The organizations represented are essentially non-profit companies. They are not created for profit. The main goal of such enterprises is to provide financial support to the participants of the said mutual insurance company in the event of insurance events.
Insurance Agents - Individuals
The subjects of insurance are insurance brokers, actuaries, agents, emergency commissioners, dispatchers. Thus, in addition to the direct insurer, these are persons who provide their services in the insurance industry of the financial market.
Insurance agents are intermediaries between a financial institution and a client. Given the requirements of the law, the agent may be an individual who has a permanent residence and entered into a contractual relationship with the insurer. Based on the provisions of the contract, the insurance agent represents the interests of the insurance company, selling its products. In addition to direct sales, insurance agents make cash insurance payments to banking institutions, draw up reports on concluded contracts, and advise the client on all insurance matters.
Insurance agents can work both for a specific insurance organization, and conclude a contract with an insurance general agent (CGA). The subjects of insurance are such forms of organization of work of insurance agents. They select for themselves subagents who can work simultaneously for several insurance companies.
Insurance Agents - Legal Entities
In addition to individuals, legal entities can also act as insurance agents. So, many travel companies, carriers, banking and non-banking institutions conclude contracts with insurance companies for the sale of their products. Travel companies are interested in obtaining medical insurance for traveling abroad and the Green Card. Carriers prefer cargo insurance and freight forwarders liability for the delivery of goods. When issuing loans, banks, pawnshops, and credit unions draw up property insurance contracts against bail or life of the loan recipient.
Insurance broker
The subjects of insurance are insurance brokers. Their activities are similar to those of insurance agents. At the same time, there are a number of significant differences. The agent works for an insurance company and serves customers by accepting insurance payments. A broker cannot simultaneously work for both clients and the insurance company. An insurance broker on behalf of the insurance company is looking for customers and ensures the conclusion of the contract. Or, on behalf of a client, he is looking for an insurance company that will satisfy the client's insurance protection requirements. Thus, the insurance broker acts as a link between the insured and the insurer.
In order to control the activities of insurance brokers, a unified register has been created; compulsory licensing of brokerage activities is being carried out. He does not have the right to engage in any business activity other than providing insurance services.
Insurance Actuaries
The subjects of insurance are actuaries. These are qualified specialists who make calculations of economically sound insurance tariffs for all types of insurance. Also, insurance actuaries analyze the availability and completeness of reserves of the insurance organization. Given the need for proper management of insurance risks, insurance actuaries make economic forecasts on the investment attractiveness of the insurer's insurance portfolio.
Such calculations can only be done by an individual who has available an appropriate economic education. Insurance actuaries perform their work while being with the insurance company either in labor relations, or cooperating on the terms of a civil law agreement.
Actuarial calculations are based on economic, statistical, and mathematical data. Properly executed calculations reflect the real picture of the availability of insurance reserves of the company or are the basis for developing a tariff policy for the developed types of insurance.
Underwriter
Along with actuaries who make calculations for new insurance programs, there are insurance specialists who analyze the concluded insurance contracts, and also present their conclusions about the possibility of concluding a particular insurance contract. Underwriters are also subjects of insurance. In the course of their activities, these experts evaluate objects that they offer to take under insurance coverage. Before entering into an insurance contract, the underwriter checks the availability of official documents confirming the ownership or use of the property. If the client requires individual insurance conditions, a professional employee of the insurance company will calculate the possible loss-making of such an agreement and present the calculated rate.
Emergency commissioner
Specialists who calculate the amount of losses incurred also belong to the category of persons providing insurance services. Therefore, the subjects of insurance are emergency commissioners. Based on the norms of the current insurance legislation, both an individual and a legal entity can act as an emergency commissioner. Such a specialist is required to have a higher education, as well as a diploma of professional training in a specialized program.
The emergency commissioner deals with the settlement of insurance indemnity payments, starting with the acceptance of the application from the injured policyholder and ending with the execution of the insurance act with its transfer to the accounting department for payment. In the process of drawing up documents for payments, the emergency commissioner clarifies all the circumstances of the insurance event, draws up requests to the relevant organizations to confirm the fact of the incident, determines the amount of damage received, makes insurance compensation calculations.
Dispatcher (adjuster)
The work of the emergency commissioner occurs mainly with property insurance or comprehensive insurance contracts. To determine the losses on insurance events in maritime insurance, they involve dispatchers, who are also subjects of insurance business. In accordance with the approved rules of maritime transport, when an insurance event occurs, the adjuster draws up settlements for declared losses. He studies the circumstances of the occurrence of insurance risk, studies the concluded insurance contracts and draws conclusions in the form of an expert opinion.
All of these insurance entities are part of a single insurance market. Therefore, it is not true that the insurance participants are the insurance participants mentioned above, and only they. Indeed, every year the diversity of insurance risks increases, and we should expect amendments to existing laws and an increase in the number of insurance entities.