In the process of establishing social institutions in the Russian Federation, much attention was paid to the regulation of insurance activities. This is due to the high level of social significance of this type of work. The occurrence of an insured event can harm the entire national economy. State regulation of insurance activity occurs by submitting reports, checking the compliance of information with actual results and normative regulation.
Supervision
State regulation and supervision of insurance activities are divided into preliminary, current and subsequent. In the first case, we are talking about checking the compliance of companies with the requirements for which a license is issued, and registration of insurers. Ongoing supervision consists in verifying compliance with the law by market participants: analysis of reports, revocation of licenses, exclusion of brokers from the registry, etc. They will be discussed in more detail below.
State legal regulation of insurance activities is carried out by the Law of the Russian Federation “On the organization of insurance business” and the Ministry of Finance. It applies to professional market participants, their intermediaries and beneficiaries.
Goals, functions, tasks
The objectives of state regulation of insurance activities:
- ensuring the stable functioning of the market;
- compliance by entities with regulatory acts;
- ensuring the fulfillment of obligations by the parties to the transaction;
- protection of the domestic market from foreign companies;
- transfer of taxes and fees to the state.
Directions of state regulation of insurance activities:
- adoption of laws and regulations, monitoring their compliance with state bodies;
- regulation of the solvency of insurers and ensuring compliance with their obligations;
- control over the payment of taxes by market entities;
- the imposition of sanctions on market participants.
Supervisory authorities perform such functions:
- issue a license to conduct business;
- make entries in the State Register of insurers and brokers;
- exercise control over the formation of tariffs;
- establish rules for the allocation of reserves, indicators of operations accounting;
- develop regulatory and methodological documents;
- develop and provide proposals for the development of the legislative framework.
Rights of State Supervisory Authorities
- Receive from insurers, statements of activity, from their customers and banks - information about the financial situation.
- Check for compliance with the information provided and the actual financial situation.
- In case of violation of legal requirements by companies, give instructions on how to rectify problems. If they are not fulfilled, then suspend licenses until the violations are completely eliminated.
- To file a lawsuit with the court about the liquidation of the insurer and companies operating without licenses.
Financial regulation
In world practice, a regular audit of insurance companies is carried out in this area. In the Russian Federation, this issue is still under consideration.
State regulation of the activities of insurance companies regarding their solvency and financial stability consists in calculating tariffs for certain services, forming reserves, and evaluating investment projects. Insurers conduct annual assessments of their obligations. Its results are reflected in a separate opinion, which is transmitted to the state agency.
The lack of an established audit system negatively affects the entire industry. Provisions are quickly becoming obsolete, but rarely reviewed. The steps to implement the audit are built only at the legislative level, but the goals, objectives, program and mechanisms are not defined in practice.
Insurance Unions
State and regional associations of insurers operate on the Russian market. They are formed by types of activity: medical, auto insurance, etc. Such unions are a resource of market self-regulation. Their main task is related to the preparation of proposals for legislative acts, the formation of protection funds, the development of rules and programs, methodological support of activities, staff training, etc.
The Union of Consumer Protection of the Russian Federation received weak development. Its main task is to identify unscrupulous companies, protect the interests of consumers, develop rules, insurance programs, etc.
The activities of unions on both sides should be carried out in cooperation. Taking into account the interests of insurers and their clients is an important prerequisite for market development.
World practice
Insurance contracts are complex documents from a legal point of view. It is difficult for a person without special education to understand all the wordings. In Western countries, the state regulation of insurance activity on transactions with individuals is much tougher than under contracts with legal entities. The latter can attract qualified lawyers to determine whether the terms of the document comply with regulatory enactments.
In the regions of the Russian Federation, the state regulation of insurance activity is carried out by local supervisory authorities. Within their capabilities, they are assisted by the tax service, the Central Bank and the antitrust office. Most countries in Europe use a single surveillance system. In Canada, some aspects are regulated by federal authorities, and the main powers are transferred to local provincial authorities. There is no global government regulation of insurance in the United States. Each state has its own rules.
Systems
The state regulation of insurance activity when using the public system is that companies should publish reports on the results of their activities in open publications and provide them to supervisory authorities. Consumers of services can, based on this information, form an idea of the organization and decide on the advisability of concluding a contract.
This is a liberal system. A person without special education will not be able to understand financial reports. The interests of persons who entered into contracts before the insurer had problems are not insured in any way. State control over the execution of transactions is not carried out.
The regulatory system consists in the fact that the state additionally establishes the same requirements for all organizations involved in insurance activities. They can be associated with financial security (compliance of the amount of capital with obligations assumed), forms of ownership of insurers, deadlines for reporting, etc. In case of failure to comply with these requirements, companies are sanctioned. This scheme has long been successfully operating in the UK, and has recently appeared in the EU.
Peculiarities of state regulation of insurance activities in the system of material supervision is that insurers publish reports on the results of their activities, and supervisory authorities monitor the implementation of the terms of contracts, the size of rates, and the procedure for creating reserves. In theory, with such a scheme of activity, the interests of all parties to the transaction are respected, and there is no price dumping. In this way, state regulation of insurance activity in the Russian Federation is carried out.
The material system is wider than the normative in terms of the number of objects covered. Its basic principle is that all actions must be previously agreed with state authorities. On the one hand, such a system severely limits the activities of insurers. Companies developing a new product must approve it with supervisors. Loss of time will be reflected in lost profits. On the other hand, the interests of consumers of services are protected.
Insurer's Registration
In the Russian Federation, the Ministry of Finance issues a license to carry out insurance activities. To get it, you need to form and pay the authorized capital, depending on the chosen type of activity:
- minimum 25 thousand minimum wages - all services except life insurance;
- minimum 35 thousand minimum wages - all types of insurance;
- more than 49 thousand minimum wages - only life insurance.
Within the specified limits, funds must be transferred in cash. In addition to these values, deposits are accepted in the form of property, rights of use, results of intellectual activity, etc.
Additionally, you need to provide the following documents to the Ministry of Finance:
- statement;
- constituent documents (charter, minutes of the meeting, extract from the state register).
- a payment order to transfer funds to the account of the authorized capital;
- business case study ;
- insurance rules, sample contract forms;
- tariff calculation with a detailed breakdown of the methodology used;
- data about the leader and his deputies.
As an economic rationale accepted:
- annual business plan;
- reinsurance plan in case the maximum risk liability is more than 10% of own funds;
- an algorithm for the formation of reserves and a plan for their allocation;
- balance sheet, statement of financial results.
The decision to issue a license is taken by the supervisor within 60 days after receipt of the documents. The reason for the refusal may be non-compliance of documents with legal requirements. The state body informs the legal entity about this in writing.
Stages
State regulation of insurance activities in the Russian Federation is carried out in three stages: preliminary, current and subsequent. Let's consider each of them in more detail.
Preliminary control
First comes the selection of companies that want to get a license. Not every organization can carry out insurance activities.
Admission to the market can be carried out in two ways. In the first case, the company is simply registered in the register of insurers, after which it can begin to conduct business. Such explicit admission is inherent in the publicity system.
If the concession method is used, the supervisory authorities must issue a license to carry out activities. It is necessary to provide documents confirming the ability to fulfill financial requirements. This scheme is used in most countries of the world.
Current supervision
Government bodies analyze the submitted accounting, management reporting. If necessary, request additional data. Also, their competence includes consideration of applications with proposals, complaints, inspections. That is, the state regulation of insurance activities of an insurance organization is reduced to timely assessing the financial capabilities of the company according to the accepted risks, checking the rules for the formation of reserves, the adequacy of the availability of funds to established standards.
Follow-up control
At this stage, decisions are made with respect to insurers whose performance does not meet any requirements (reorganization, liquidation). State regulation of insurance activity in the Russian Federation at this stage is to minimize the losses of customers of unscrupulous companies. Supervisory authorities may impose restrictions on the conclusion of new contracts, change tariff rates, and adjust activities on other aspects. This is carried out in the form of instructions, that is, written orders obliging the insurer to eliminate the violations within the specified period.
The grounds for imposing restrictions are:
- implementation of activities not covered by the license;
- implementation of activities prohibited by law;
- violation of the order of formation of reserves;
- unreasonable tariff cuts;
- non-compliance with the established size of the ratio of assets to liabilities;
- submission of reports, other requested documents in violation of the terms or order;
- inconsistency of the information provided with actual data;
- violation of the deadlines for notification of amendments to the charter, rules for the provision of services, rate structure
- transfer of a license to another organization;
- issue of a policy without application of rules;
- conclusion of contracts on more extended terms than those specified in the rules.
In case of failure to comply with the regulation, the supervisor may limit the license. This can be expressed both in the prohibition on the conclusion of new agreements, and in the extension of the old ones for certain types of activities or in a specified territory.