Measures of state regulation of insurance activities

Government regulation is an essential element and the principle of insurance business in any country. The purpose of government regulation is to ensure the formation and development of well-functioning insurance market, creating the necessary conditions for the insurers of various legal forms, protecting the interests of policyholders.

The system of state regulation include the following:

A. Licensing - registration of insurance companies and the issuance of licenses to conduct certain types of insurance. Licensed to conduct insurance business issued in accordance with the Terms of the licensing of insurance activity in the Russian Federation. These conditions are determined by:
form of license and its details;
requirements for the licensee (the fact of registration as a legal entity, the payment of the authorized capital requirements for its size depending on the type of insurance);
list of the documents applied to the application for a license (the founding documents, the documents confirming payment of the authorized capital, the business plan for the first year of operation, the calculation of the ratio of assets and liabilities on the appropriate form, a statute on the formation and use of insurance reserves, if necessary, a plan to Reinsurance balance of the application report on the financial results of the last reporting date, the plan placement of insurance reserves by insurance rules, the calculation of insurance rates on the appropriate form, information about the director and his deputies);
order of consideration of documents and issuance of license;
order of publication of the insurers that have received licenses.

For the license fee in the prescribed manner, which comes to the budget. If found in violation of the insurance companies state agency for supervision of insurance business has the right to suspend or restrict a license or to make a decision on its withdrawal. Refusal to issue a license, its revocation, suspension and limitation of action may be appealed in court.

Two. Control over the financial stability of insurers. The main factors of financial stability of insurance company:
sufficient equity capital;
the size of the liabilities (including technical provisions);
asset allocation;
portfolio of risks transferred to reinsurance;
tariff policy.

Three. Develop forms and procedures of statistical reporting and monitoring the timely submission of financial statements of insurance companies.

4. Taxation of insurers and policyholders.

Five. Other measures of state regulation of insurance activities, including the responsibility for avoiding damages from the insurer when the insured event.