When analyzing the fundamentals of the financial activities of insurance organizations, the insolvency (bankruptcy ) of these structures is of particular interest.
Issues related to the grounds for recognizing companies as insolvent, the procedure and conditions for the implementation of measures to prevent bankruptcy, the implementation of procedures prescribed by law, and other problems arising in cases of inability of an enterprise to fully satisfy creditors' requirements are relevant.
In the article, we consider the features of bankruptcy of insurance organizations .
Key Points
As a general sign of insolvency of legal entities is the inability to repay liabilities to creditors and the budget within three months from the date when the claims were to be satisfied.
Key regulatory provisions defining the features of bankruptcy of insurance organizations are enshrined in Federal Law No. 127.
Preventive action
To prevent insolvency (bankruptcy) of insurance organizations , the following regulatory instruments are provided:
- The provision of financial assistance by the founders / participants of a legal entity or other entities.
- Change in the structure of liabilities and assets.
- Increase in authorized capital.
- Reorganization.
- Other measures not prohibited by law.
Reasons for implementing preventive measures
Measures to prevent bankruptcy of the insurance company are taken when:
- Repeated refusal to repay monetary obligations to creditors within a month. Refusal should be understood as non-fulfillment / improper fulfillment of requirements within ten days from the date of occurrence of the corresponding obligation, unless otherwise provided by law. Only business days are taken into account.
- Failure to fulfill the obligation to deduct payments to the budget within 10 days (working) from the date of its occurrence.
- Insufficient amount of funds for timely repayment of debts (including to the budget), if the deadline for this has come.
- Repeated violation of the requirements for the structure and composition of assets established by the Ministry of Finance within 12 months. from the date of detection of the first violation.
- Revocation, suspension or limitation of the license to conduct business.
Within 15 days from the date of the occurrence of these circumstances, the insurance company must send a notice to the supervisor (Central Bank) about this. Attached is a plan to restore solvency. These actions are performed if there are no signs of bankruptcy of the insurance company .
Within 30 days (workers) after receiving the plan based on the results of its study, the supervisor makes a decision on the appointment of an interim administration in the insurance company or on the inappropriateness of this appointment. In cases provided for by resolutions of the Ministry of Finance, he is also entitled to decide on a field inspection. The audit is carried out in the manner prescribed by the supervisor.
Features bankruptcy insurance company
As a result of the analysis of the plan to restore solvency or as a result of an on-site audit, signs of insolvency can be detected. In such cases, the supervisor submits a bankruptcy claim to the insurance organization (a sample document is provided in the article).
If a legal entity carries out insurance related to the activities of a trade union of insurers or another organization that is responsible for transferring compensation payments, the head must send a notification to these structures within a week from the day the grounds for the implementation of bankruptcy prevention measures arise. The corresponding position secures 4 part of Art. 184.1 of the Federal Law No. 127.
During the bankruptcy procedure of an insurance company, trade unions have responsibilities and exercise the rights stipulated by law for financial institutions.
Interim administration
It is prescribed if:
- Reasons have been identified for the implementation of measures to prevent bankruptcy of the insurance organization in the absence of notification of the supervisor about their availability.
- A decision was made to implement a plan to restore solvency or to establish control over its implementation.
- Legal entity does not execute / improperly fulfills the points of the plan.
The decision to introduce an interim administration should be motivated by the supervisor.
Legal requirements
The decision to introduce an interim administration is made without fail in cases of revocation, suspension or limitation of the license. The reasons for this are:
- An insurance company conducting activities prohibited by regulatory acts of the Russian Federation, as well as violating the conditions established for issuing a permit.
- Non-compliance by the organization with the provisions of the legislation governing insurance activities, in terms of the creation and placement of funds of funds, reserve and own funds, guaranteeing the implementation of compensation payments.
- Non-compliance by the company with the requirements for ensuring the ratio of the company's own funds to the obligations assumed by it, as well as other requirements related to maintaining solvency and financial stability.
- Insufficient funds for timely repayment of obligations to creditors and the budget.
The insurance company has the right to challenge the decision made by the supervisor in an arbitration or court of general jurisdiction. However, the appeal process does not suspend the work of the interim administration.
Signs of Bankruptcy
They are installed in Art. 183.16 Federal Law No. 127. Bankruptcy proceedings of insurance organizations are initiated if:
- The total amount of claims made by creditors for monetary obligations for the payment of severance pay or wages of citizens who worked (work) under labor contracts, or the total debt to the budget is not less than 100 thousand rubles, and these requirements are not fulfilled in a two-week period from the day of their execution. Obligations to employees in this case must be confirmed by judicial acts that have entered into force.
- Arbitration orders or instances of general jurisdiction were not executed, according to which IL (writ of execution) were issued for the enforcement of the decision of the arbitral tribunal on foreclosure of funds of a financial institution. The amount of creditors' claims does not matter.
- The value of the property / assets of the company is not enough to pay off obligations to creditors and the budget.
- The activities of the interim administration did not lead to the restoration of solvency.
Sample bankruptcy insurance company
The supervisory authority shall indicate in the document:
- The name of the court to which it is filed.
- Name of insurance company, address, identifying information. The latter include the number of records of state registration in the status of legal entity, TIN.
- The name of the control structure and its address.
- The volume of claims for monetary obligations, the amount of arrears on contributions to the budget, the value of assets (property) or other information related to the proceedings.
- F. I. O. of the arbitration manager, name and address of the self-regulatory structure in which it is a member, or name of the organization from whose membership it should be approved, its address.
- Enumeration of applications.
The statement of the interim administration indicates practically the same information, with the exception of a number of points:
- Instead of the name of the control body, the full name of the head of the interim administration is indicated, the address to which correspondence will be sent to him, the details of the document confirming the approval of the person in this position.
- The name of the self-regulatory structure and its address are indicated if the head of the administration is the arbitration manager.
- Information on the candidacy of the bankruptcy trustee if, in accordance with the Federal Law No. 127, is not the Deposit Insurance Agency.
Attachments to the application
In addition to the documents, the list of which is fixed by the agro-industrial complex, the following are attached to the application:
- Constituent documentation of an insurance company, state registration certificate in legal entity status.
- The balance sheet at the last reporting date or documents replacing it.
- The decision of the control structure on sending an application to arbitration made by the interim administration, if Federal Law No. 127 is not established, that the administration itself must accept it.
- A report on the value of all property of the insurance company, formed by the appraiser (if there is such a document).
- Conclusion on the financial condition of the insurance company, if the application is submitted in accordance with Art. 183.13 of the Federal Law No. 127, or a report on the work of the interim administration, if the appeal to the court is sent in accordance with Art. 183.14 of the same Law.
- Other documents provided for by Federal Law No. 127.
Acceptance of application
Copies of the arbitration decision on the adoption of the appeal for consideration shall be sent to the applicant, the insurance organization and the control body no later than the day following the date of its adoption.
The supervisor, in turn, sends a copy of the determination to the self-regulatory organization and the Deposit Insurance Agency.
Case Review
Bankruptcy proceedings of insurance organizations are carried out in an arbitration court. In this case, the provisions of the AIC and the Federal Law No. 127 apply.
An application for declaring the insurance company insolvent is accepted by the court if there is at least one sign mentioned above. In the event of the bankruptcy of the insurance company , the assessment of the financial condition takes into account its obligation to make compensation payments, as well as to deduct part of the premium upon early termination of the insurance contract. The obligation must be established by federal law that has entered into force by a court order or insurance agreement.
When initiating bankruptcy proceedings of an insurance organization upon appeal by the interim administration, the duration of the proceedings shall not exceed 4 months. from the date of acceptance of the application for consideration. This time includes the time allotted for the preparation of materials and the adoption of a decision.
Nuances
When considering a case, the recovery and external management procedures provided for in Federal Law No. 127 do not apply.
Upon initiation of proceedings at the request of the interim administration due to the inability to restore the solvency of the company, a monitoring procedure is not appointed.
Termination of contract
When the court makes a decision on declaring the company insolvent and on the start of bankruptcy proceedings within a month from the date of receipt of the corresponding notice, the insurers can unilaterally cancel the insurance contract.
At the same time, they have the right to rely on part of the premium paid to the bankrupt company for the non-expired period of the agreement or to receive a redemption payment.
Creditors meeting
Its participants are authorized bodies and bankruptcy creditors, the requirements of which are entered in the register at the date of the meeting. These entities have the right to vote.
Representatives of:
- employees of the debtor;
- participants / founders;
- the self-regulatory organization in which the arbitration manager is a member;
- supervisory authority.
These persons may speak on issues on the agenda of the meeting. As a rule, the address where creditors' meetings are held in Moscow based on decisions of the bankruptcy court of insurance companies is Bolshoi Golovin Pereulok, 3, bldg. 2 (2nd floor).
Transfer of insurance portfolio
Beneficiaries and policyholders must be notified by the interim administration, the bankruptcy trustee or (if they are not appointed) the insurance company itself about the upcoming transfer of the portfolio. The notice is published in the manner prescribed by Art. 28 № № 127, not later than a month before the procedure.
The notification must include the following information:
- Name of the company transferring the insurance portfolio, state registration number in legal entity status, TIN, address.
- The grounds for this operation.
- Information on the suspension / limitation of the powers of the executive structures of the organization transferring the portfolio.
- The name of the management company, identifying signs (TIN, state registration number), address.
IC "Investments and Finances"
In July 2016, by decision of the Central Bank, the powers of the executive structures of the company were suspended. In October of the same year, information appeared about the revocation of the license from the Investment and Finance insurance company. The bankruptcy of the enterprise was initiated by the interim administration appointed by the Central Bank.
The decision to revoke the license was due to:
- Commitment by the company of actions contrary to the laws of the Russian Federation
- The presence of deviations from the provisions of regulatory acts that are not corrected within the prescribed period.
- Failure to comply with the requirements of the Central Bank.
When the first information about the likelihood of initiating proceedings against the company appeared, it was recommended to customers and partners to draw up their claims in writing as soon as possible and forward them to the arbitration court.
SG "Uralsib"
The first application by individuals to declare the company insolvent was sent to the court in December 2016. On January 31, 2017, the first appeal was submitted from the legal entity.
As a survey of a number of market participants showed, the debt of an enterprise to partners reaches several tens of millions of rubles.
Analysis of financial statements for 2015 showed that the organization worked for two years in a row with negative capital. The company's assets by the end of the year were less than the amount of liabilities by 2.9 billion rubles. In addition, the company violated the standards of the Central Bank on the solvency margin, the allocation of own funds and insurance reserves.
On August 11, 2016, the license of SG Uralsib was limited in connection with the failure to comply with the requirements of the Central Bank.
At the end of January, a company reliability rating of B ++ was confirmed.
According to experts, such a low indicator is associated with non-compliance with regulatory requirements and a negative deviation of the actual solvency margin from the established norm.
Specialists also noted:
- negative return on equity and assets;
- reduction of own funds;
- negative result of insurance operations reviewed for 4 consecutive quarters without a cumulative total;
- reduction in contributions;
- low liquidity (payback) of investments and a decrease in their value;
- high ratio of receivables and payables to assets, etc.
It is worth saying that the rumors about the bankruptcy of the insurance company Uralsib walked quite a while. This company is part of the assets of Uralsib Bank, in which, since the fall of 2015, a rehabilitation procedure has been carried out with the participation of the head of the Oil and Gas Industry V. Kogan and the Deposit Insurance Agency.
IC "Moscow Region"
Since May 24, 2017, the organization has a temporary administration. On July 20, a bankruptcy petition was filed with the Moscow Arbitration Court. Insurance company "Moscow Region" Lost its licenses the very next day - on July 21, it was recalled by the Central Bank. The company is forbidden to conduct activities on voluntary personal and property insurance, as well as on compulsory motor liability insurance.
The relevant decision was made by the regulator in connection with the failure of the company to eliminate violations of the provisions of the legislation governing insurance activities within the time limit set by the Central Bank, in connection with which the licenses were suspended.
In particular, the company did not comply with the requirements for solvency and financial stability in terms of creating insurance reserves, and did not comply with the conditions and procedure for investing reserve and own funds.
According to the Central Bank, the amount of insurance company fees for 2016 exceeded 1.6 billion rubles, and payments amounted to 596.7 million rubles.