The financial stability of an insurance company as a system that adapts to changes in the external environment has two characteristics: solvency, that is, the ability to pay off its obligations, and the presence of financial potential for development to meet possible changes in external conditions.
Solvency is the most important indicator of the reliability of an insurance company, its financial stability and, therefore, the main indicator of a company’s attractiveness to potential customers.
The financial potential of an insurance organization refers to the financial resources that are in financial circulation and used to conduct insurance operations and carry out investment activities.
The financial potential of an insurance organization consists of two main parts - own capital and attracted capital, and the attracted part of capital largely prevails over the insurance company’s own capital.
In almost all OECD countries, except Korea, one of the conditions for issuing permission to conduct insurance activities is that the insurance company has a minimum capital, the requirements for which are: different countries are different, and in EU countries they vary depending on the type of insurance1. In addition to equity capital or equivalent funds, many EU countries require an organizational fund, which is deposited for several years.
In accordance with Art. 25 of the Insurance Law guarantees the financial stability of the insurer are:
Economically justified insurance rates;
Insurance reserves sufficient to fulfill obligations under insurance, coinsurance, reinsurance, mutual insurance contracts;
Own funds;
Reinsurance.
Insurance reserves and the insurer's own funds must be provided with assets that meet the requirements of diversification, liquidity, repayment and profitability.
Own funds of insurers (with the exception of mutual insurance companies that provide insurance exclusively to their members) include authorized capital, reserve capital, additional capital, and retained earnings.
Insurers must have a fully paid-up authorized capital, the amount of which must not be lower than the minimum amount of authorized capital established by this Law.
The minimum amount of the insurer's authorized capital is determined by clause 3 of Art. 25 of the Insurance Law.
The insurer may transfer the obligations assumed by it under insurance contracts (insurance portfolio) to one insurer or several insurers (replacement of the insurer) that have licenses to carry out those types of insurance for which the insurance portfolio is transferred, and have sufficient own funds, that is, meeting the solvency requirements taking into account the newly assumed obligations. The transfer of the insurance portfolio is carried out in the manner established by the legislation of the Russian Federation.
Transfer of the insurance portfolio cannot be carried out in the following cases:
Concluding insurance contracts subject to transfer in violation of the legislation of the Russian Federation;
Failure of the insurer accepting the insurance portfolio to comply with the financial stability requirements of the insurance law;
Lack of written consent from policyholders and insured persons to replace the insurer;
Lack of indication in the license issued to the insurer accepting the insurance portfolio of the type of insurance for which the insurance contracts were concluded;
The insurer transferring the insurance portfolio does not have assets accepted to ensure insurance reserves (except in cases of insolvency (bankruptcy)).
Simultaneously with the transfer of the insurance portfolio, assets are transferred in the amount of insurance reserves corresponding to the transferred insurance liabilities.
If the insurance rules of the insurer accepting the insurance portfolio do not correspond to the insurance rules of the insurer transferring the insurance portfolio, changes to the terms of the insurance contracts must be agreed upon with the policyholder.
The sufficiency of an insurance company’s own funds guarantees its solvency under two conditions: the presence of insurance reserves not lower than the standard level and correct investment policy.
A mandatory condition for ensuring the solvency of insurance companies is compliance with a certain ratio of assets and liabilities or solvency margin.
Solvency margin is a guarantee of fulfillment of the insurer's obligations. According to the European Insurance Directives, insurers must have sufficient funds in the form of a minimum guarantee fund at the beginning of the insurance business and their own funds for conducting business, which serve as a reserve stock to meet obligations to policyholders at any time.
The works of L.A. were devoted to the issues of ensuring the solvency of insurers. Orlanyuk-Malitskaya, who laid scientific basis regulatory requirements for calculating the solvency of Russian insurers.
In accordance with the “Regulations on the procedure for insurers to calculate the standard ratio of assets and insurance liabilities assumed by them” (order of the Ministry of Finance of Russia dated November 2, 2001 No. 90n, as amended dated January 14, 2005 No. 2n), the insurer’s own capital is calculated as the sum of the authorized (share), additional , reserve capital, retained earnings reporting year and previous years, reduced by the amount of uncovered losses of the reporting year and previous years, debt of shareholders (participants) for contributions to the authorized (joint) capital, own shares purchased from shareholders, intangible assets and accounts receivable, whose repayment terms have expired.
The standard ratio of assets and accepted insurance liabilities is understood as the amount within which the insurer must have its own capital, free from any future obligations, with the exception of the claims of the founders, reduced by the amount of intangible assets and receivables whose repayment terms have expired. This quantity is called the actual size of the solvency margin.
The standard solvency margin for life insurance is equal to the product of 5% of the life insurance reserve and the adjustment factor.
The adjustment factor is defined as the ratio of the life insurance reserve minus the reinsurer's share in the life insurance reserve to the amount of the specified reserve. If the correction factor is less than 0.85, then for calculation it is taken equal to 0.85.
The standard size of the solvency margin for insurance other than life insurance is equal to the largest of the following two indicators, multiplied by the adjustment factor.
The first indicator is calculated on the basis of insurance premiums (contributions) for the billing period - the year (12 months) preceding the reporting date and is equal to 16% of the amount of insurance premiums (contributions) accrued under insurance contracts, coinsurance and contracts accepted for reinsurance, for the billing period. period reduced by the amount:
Insurance premiums (contributions) returned to policyholders (reinsurers) in connection with the termination (change of conditions) of insurance contracts, co-insurance and contracts accepted for reinsurance during the billing period;
Deductions of insurance premiums (contributions) under insurance contracts, coinsurance to the reserve of preventive measures for the billing period;
Deductions of insurance premiums (contributions) under insurance contracts, coinsurance in cases provided for by current legislation, for the billing period.
An insurer operating for less than 12 months takes as the calculation period for the first indicator the period from the moment it first received a license until the reporting date.
The second indicator is calculated on the basis of insurance payments for the billing period - 3 years (36 months) preceding the reporting date and is equal to 23% of one third of the amount:
Insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance, minus the amounts of proceeds associated with the implementation of the right of claim (recourse) transferred to the insurer, which the policyholder (insured, beneficiary) has against the person responsible for the losses , indemnified as a result of insurance, during the billing period;
An insurer operating insurance other than life insurance for less than 3 years does not calculate the second indicator.
The calculation period for calculating the correction factor is one year. The correction factor is calculated as amount ratio:
Insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for both reinsurance, minus the accrued share of reinsurers in insurance payments, during the billing period;
Changes in the reserve of declared, but not settled losses and the reserve of occurred, but not declared losses, under insurance contracts, co-insurance and contracts accepted for reinsurance, minus changes in the share of reinsurers in these reserves, for the billing period;
to the amount(not excluding the share of reinsurers):
Insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance during the billing period;
Changes in the reserve of declared, but not settled losses and the reserve of occurred, but not declared losses, under insurance contracts, co-insurance and contracts accepted for reinsurance, for the billing period.
If there are no insurance payments in the calculation period under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance, the adjustment factor is accepted = 1.
If, according to the calculation, the correction factor is less than 0.5, then for the purposes of further calculation it is taken equal to 0.5; if greater than 1, then equal to 1.
An insurer operating for less than 12 months takes the period from the date of first obtaining a license to the reporting date as the calculation period for the adjustment factor.
If actual data on operations by type compulsory insurance for at least 3 years indicate stable positive financial results for each year for the specified type of insurance and if the amount of insurance premiums (contributions) for this type of insurance is at least 25% of the amount of insurance premiums (contributions) for insurance other than life insurance, then in agreement with
The Ministry of Finance of Russia may accept interest values when calculating the first and second indicators for this type of insurance as less, but not less than two-thirds of the above values.
In this case, the standard size of the solvency margin for insurance other than life insurance is determined as the sum of the standard size of the solvency margin calculated separately for the types of compulsory insurance indicated above and other types of insurance other than life insurance.
The standard size of the solvency margin of an insurer carrying out life insurance and insurance other than life insurance is determined by adding the standard size of the solvency margin for life insurance and the standard size of the solvency margin for insurance other than life insurance
If the standard size of the insurer's solvency margin is less than the minimum amount of the authorized (share) capital established by the insurance law, then the legally established minimum amount of the authorized (share) capital is taken as the standard size of the insurer's solvency margin.
The ratio between the actual and standard solvency margins is calculated by the insurer on a quarterly basis.
The actual size of the insurer's solvency margin should not be less the standard size of the solvency margin.
If at the end of the reporting year the actual size of the insurer's solvency margin exceeded the standard solvency margin by less than 30%, the insurer is obliged to submit a plan for improving its financial position for approval by the Ministry of Finance of Russia. The approximate financial recovery plan was approved by order of the insurance supervision dated October 24, 1996 No. 02-02/21.
The calculation described above can be presented in a somewhat simplified form:
The following conditions must be met quarterly:
At the end of the year, this condition intensifies:
F ≥ 1.3 (Nl + Ni),
Where: N g – the standard size of the solvency margin for life insurance is equal to the product of the amount of reserves for life insurance by the adjustment factor K popr 〈 0.85;
Ni is the standard solvency margin for other types of insurance, equal to:
max ( 0.16(S–S rast –R pm–S oblig); 0.23 × 1/3 (Exit + ΔРЗУ + ΔРПНУ)) × K popr, where K popr ≥ 0.5
From the analysis of the methodology for calculating solvency described above, we can conclude that with sufficiently large volumes of accepted insurance liability (accrued insurance premiums) for types of insurance other than life insurance, the first indicator of the standard size of the solvency margin will exceed the insurer’s own capital, free from any future obligations and the actual size of the insurer's solvency margin will become less than its standard size. Therefore, the external development of an insurance company due to, for example, an increase in insurance volumes must necessarily be accompanied by its internal development (increase in authorized capital, reserve capital, profit, etc.)
Price net assets insurance companies created in the form of joint stock companies, necessary to assess the adequacy of the authorized capital, is assessed according to the accounting report in the manner established by the Ministry of Finance of Russia and the Federal Market Commission valuable papers as the difference between the amount of assets accepted for calculation and the amount of liabilities accepted for calculation.
If at the end of the second and each subsequent financial year the value of the net assets of the insurance company in the form joint stock company(limited liability company) turns out to be less than the authorized capital, the company is obliged to declare and register in the prescribed manner a decrease in the authorized capital in accordance with the requirements of the legislation of the Russian Federation (Articles 90 and 99 of the Civil Code of the Russian Federation).
Under financial stability the insurance organization understands the ability to fulfill its obligations with all its available property. Naturally, the insurer has external and internal obligations. It is customary to divide external obligations into insurance and non-insurance (other). Unless otherwise specifically stated, due to the special significance of insurance obligations, financial stability is primarily understood as the ability of the insurer to fulfill its insurance obligations 1 .
The financial stability of an insurance organization is ensured by sufficient and paid-up authorized capital, insurance reserves adequate to accepted obligations, as well as an adopted reinsurance system. The use of the reinsurance system assumes that the insurer is responsible only for those risks for which it can fulfill obligations based on its financial capabilities. The criterion for the financial stability of an insurer is usually considered to be the sufficiency of insurance reserves and its own available funds to fulfill the insurer’s obligations. The most important indicator of the financial stability of the insurer, its reliability, is solvency.
Under solvency insurance company understands its ability to fulfill its obligations at any given time. As in the case of financial stability, when assessing solvency, it is usually, unless otherwise stated, understood as its ability to meet, first of all, insurance obligations.
The condition on the insurer's solvency is more significant than the condition on financial stability, since it imposes an additional requirement on the company's assets.
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1 V Lately In the global insurance market, the practice of selling not an insurance, but a so-called financial product, which, along with insurance, includes other services of a financial and credit nature, is increasingly developing. For this reason, the importance of other (non-insurance) obligations of an insurance organization increases, which determines when assessing its financial stability and solvency, taking into account all external obligations, and not just insurance ones. The internal obligations of an insurance organization are not particularly specific.
In addition to the fact that they must be sufficient, they must be liquid to the extent necessary to fulfill insurance obligations at any time.
19.4. Assessment of the solvency of an insurance organization
Financial support for the fulfillment of obligations for insurance payments for the insurer is the formed insurance reserves, as well as own funds free from obligations, called net assets. The significance of the last element is due to the fact that insurance reserves, as a rule, are not enough to fulfill insurance obligations. This is explained primarily by the random nature of insurance payments and the fact that in its professional activities the insurer is constantly faced with technical, non-technical and investment risks (Fig. 19.3)
Since insurance reserves are calculated using special methods, and therefore their size is quite certain, assessing the solvency of an insurance organization can be reduced to assessing the sufficiency of the insurer’s own available funds (net assets), which, together with the assets covering insurance reserves, are used to fulfill insurance obligations ( Fig. 19.4)
The excess of the insurer's assets over its liabilities confirms the presence solvency margin(net assets of the insurer) - the positive difference between all assets of the insurer and its liabilities, which is used to fulfill insurance obligations in the event of insufficient insurance reserves. The essence of the current methodology for assessing the solvency of an insurance organization comes down to comparing the actual size of the solvency margin (the actual size of the insurer's net assets) with its standard size, calculated according to the data of the insurance organization being assessed in accordance with the instructional materials.
The solvency assessment is carried out in three stages.
Stage 1. Calculation of the standard size of the solvency margin (the standard value of the insurer's net assets), due to the specifics of concluded insurance contracts, as well as the volume of obligations accepted for fulfillment.
The instruction assumes an assessment of solvency for an insurance company engaged in life insurance and other types of insurance at the same time, therefore the total standard size of the solvency margin is calculated as the sum of two terms - for life insurance and types of insurance other than life insurance. For types of insurance other than life insurance, the private standard solvency margin Nrv. is calculated using the formula:Indicator P1 indicates the minimum amount of net assets that an insurance company must have based on its insurance liabilities. It is calculated by the formula:
where PR is the amount of insurance premiums for the period for which solvency is assessed (usually one year) under insurance contracts, co-insurance and accepted for reinsurance, reduced by the annual amount of returned insurance premiums, deductions to the reserve of preventive measures and other deductions provided for by law.
Indicator P 2 indicates the minimum amount of net assets that an insurance company should have based on the insurance obligations it has fulfilled. It is calculated by the formula:
where SV is the sum of the average annual changes over the previous three years in loss reserves and actual insurance payments under insurance contracts, co-insurance and accepted for reinsurance, minus payments received under recourse claims.
The adjustment factor k vyp is calculated for the year preceding the reporting date as the ratio of the amount of net insurance payments (total payments minus the participation of reinsurers) and net changes in loss reserves (total changes minus the participation of reinsurers) to the total amount of insurance payments of changes in loss reserves. In the case when the actual value of the coefficient does not exceed 0.5, its value is assumed to be 0.5; if there was no reinsurance, the coefficient is 1.
For life insurance, the standard size of the NSG solvency margin is calculated using the formula:
where RSL is the life insurance reserve as of the last reporting date; k is an adjustment coefficient calculated as the ratio of the life insurance reserve minus the participation of reinsurers to the amount of the specified reserve. In the case when the actual value of the coefficient is less than 0.85, its value is taken equal to 0.85; if there was no reinsurance, the coefficient is 1.
The standard size of the general solvency margin H is calculated using the formula:
If a company is engaged in life insurance and other types of insurance and the calculated standard size of the solvency margin N is less than the minimum amount of the authorized capital provided for by law, N is set equal to this legally established value.
Stage 2. Determination of the actual size of the solvency margin of PLF - net assets.
According to Russian legislation, the actual size of the solvency margin, which indicates actual solvency, is calculated using the formula:
Mpf = (UK + DC + RK + NP) - (NU + ZA + AP + NA + DZP), where MC is the authorized capital; DC-additional capital; RK-reserve capital; NP - retained earnings of the reporting year and previous years, NU - uncovered losses of the reporting year and previous years; FOR - debt of shareholders (participants) for contributions to the authorized capital; AP - own shares purchased from shareholders; NA - intangible assets; DRP - overdue accounts receivable.
Stage 3. Comparison of the actual size of the solvency margin with the standard one.
If the actual solvent standard is N, i.e. if the ratio PLf ≥ N is observed, we can conclude that the insurance organization is solvent. Otherwise, control over the financial recovery of the insurer; carried out by supervisory authorities over insurance activities.
Within the European Union, solvency assessment is carried out separately for insurance companies engaged in risk types of insurance and insurance companies engaged in life insurance. Introduction Russian Federation The WTO and the European Union assume, in particular, that the assessment of the solvency of Russian insurance companies should be brought into line with European and world standards.
Under financial stability An insurance company understands the stability of its financial position, ensured by a sufficient share of equity capital (net assets) as part of the sources of financing. The external manifestation of the financial stability of an insurance organization is its solvency, which, in turn, should be understood as the ability of the insurer to fulfill obligations to pay the insured amount or insurance compensation to the policyholder or the insured person under insurance contracts.
In accordance with Ch. 3 of the Insurance Law, which determines the procedure for ensuring the financial stability of insurers in the Russian Federation, guarantees for ensuring the financial stability of insurance companies are:
- economically justified insurance rates;
- insurance reserves sufficient to fulfill obligations under insurance, coinsurance, reinsurance, mutual insurance contracts;
- own funds;
- reinsurance system.
Insurers' own funds include authorized capital, reserve capital, additional capital, and retained earnings. Sufficient size authorized capital ensures the financial stability of the company at the time of its creation and at initial period activities when the volume of insurance premium receipts is small. The minimum amount of authorized capital is determined by current legislation and the constituent documents of the company. It can be used both to ensure statutory activities and to cover the costs of insurance payments in the event of insufficient insurance reserves and insurance proceeds.
The next condition for ensuring financial stability is creation of insurance reserves and funds, which reflect the amount of unfulfilled this moment the time of the insurer's obligations for insurance payments.
The obligation of insurers to form insurance reserves is enshrined in the Insurance Law. In accordance with it, insurers form, from the insurance premiums received, the insurance reserves necessary for upcoming insurance payments for personal insurance, property insurance and liability insurance.
It should be noted that if an insurance company provides several types of insurance, then reserves for each type are formed separately.
Insurance reserves must be formed and placed in accordance with the rules approved by the Federal Financial Markets Service of Russia by the following regulations:
- 1) Order of the Ministry of Finance of Russia dated July 2, 2012 No. 100n “On approval of the Procedure for the placement of insurance reserve funds by insurers”;
- 2) Order of the Ministry of Finance of Russia dated October 18, 2002 No. 24-08/13 “On Examples of calculation by insurers of the reserve for occurred but unreported losses and the stabilization reserve.”
The insurer has the right to form insurance reserves in accordance with the regulatory instructions contained in the above-mentioned regulations, as well as in agreement with the Ministry of Finance of the Russian Federation in cases provided for by the Rules formation of insurance reserves for insurance other than life insurance, approved by Order of the Ministry of Finance of Russia dated June 11, 2002 No. 51n, may calculate other insurance reserves and (or) use other methods for their calculation. The composition of insurance reserves is shown in Fig. 3.2.
Rice. 3.2.
The next factor ensuring the financial stability of the insurer is compliance with the normative relationship between assets and assumed liabilities.
Insurers are required to comply with the regulatory relationships between assets and insurance liabilities assumed by them in the amount of the so-called standard solvency margin. The methodology for calculating these ratios and their standard values are established by the Federal Body for Supervision of Insurance Activities in accordance with the Regulations on the procedure for calculating by insurers the standard ratio of assets and insurance liabilities assumed by them, approved by Order of the Ministry of Finance of the Russian Federation dated November 2, 2001 No. 90n. This methodology does not apply to medical insurance organizations in terms of compulsory medical insurance operations.
The normative ratio between the assets of the insurer and the insurance liabilities assumed by it (the normative size of the solvency margin) is understood as the value within which the insurer, based on the specifics of the concluded contracts and the volume of accepted insurance liabilities, must have its own capital, free from any future obligations, with the exception of rights claims of the founders, reduced by the amount of intangible assets and receivables whose repayment terms have expired (the actual size of the solvency margin).
The essence of the current methodology for assessing the solvency of an insurance organization comes down to comparing the actual size of the solvency margin with the standard size, calculated according to the data of the insurance organization being assessed in accordance with the said provision.
Actual Margin Size The solvency of the insurer is calculated as the amount:
- authorized capital;
- additional capital;
- reserve capital;
- retained earnings of the reporting year and previous years;
- reduced by the amount:
- – uncovered losses of the reporting year and previous years;
- – debt of shareholders (participants) for contributions to the authorized capital;
- – own shares purchased from shareholders;
- – intangible assets;
- – accounts receivable whose repayment terms have expired.
The standard margin is calculated on the basis of the Regulations on the procedure for calculating by insurers the standard ratio of assets and insurance liabilities assumed by them separately for life insurance and for insurance other than life insurance.
The standard size of the insurer's solvency margin for insurance other than life insurance is equal to the largest of the two indicators considered below, multiplied by the correction factor.
The first indicator is an indicator that is calculated on the basis of insurance premiums (contributions) for the 12 months preceding the reporting date. This indicator is equal to 16% of the amount of insurance premiums (contributions) accrued under insurance contracts, co-insurance and reinsurance contracts for the billing period, reduced by the amount:
- insurance premiums (contributions) returned to policyholders (reinsurers) in connection with the termination (change of conditions) of insurance contracts, co-insurance and contracts accepted for reinsurance for the billing period;
- deductions from insurance premiums (contributions) under insurance contracts, coinsurance to the reserve of preventive measures for the billing period;
- other deductions from insurance premiums (contributions) under insurance contracts, coinsurance in cases provided for by current legislation, for the billing period.
The second indicator is an indicator calculated on the basis of insurance payments; the calculation period for its calculation is three years (36 months) preceding the reporting date. This indicator is equal to 23% of 1/3 of the amount:
- insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance, minus the amounts of proceeds associated with the implementation of the right of claim transferred to the insurer, which the insured (insured, beneficiary) has against the person responsible for losses compensated in the result of insurance for the billing period;
- changes in the reserve of declared, but unresolved losses, and the reserve of occurred, but undeclared losses, under insurance contracts, co-insurance and contracts accepted for reinsurance, for the billing period.
An insurer that has received less than three years (36 months) from the moment it first received a license to carry out insurance other than life insurance in accordance with the established procedure until the reporting date does not calculate the second indicator.
The calculation period for calculating the adjustment factor is the year (12 months) preceding the reporting date. The adjustment coefficient is defined as the ratio of the sum of: insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance, minus the accrued share of reinsurers in insurance payments for the billing period; changes in the reserve of declared but unsettled losses, and the reserve of occurred but undeclared losses, under insurance contracts, co-insurance and contracts accepted for reinsurance, minus changes in the share of reinsurers in these reserves for the billing period; to the amount (not excluding the share of reinsurers): insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance for the billing period; changes in the reserve of declared, but unresolved losses, and the reserve of occurred, but undeclared losses, under insurance contracts, co-insurance and contracts accepted for reinsurance, for the billing period.
If there are no insurance payments in the calculation period under insurance contracts, co-insurance contracts and contracts accepted for reinsurance, the adjustment factor is taken equal to 1.
If the correction factor is less than 0.5, then for calculation purposes it is taken equal to 0.5, if more than 1 - equal to 1.
An insurer that has received less than a year (12 months) from the moment it first received a license to carry out insurance other than life insurance in accordance with the established procedure until the reporting date, uses the period from the moment it received the license to the reporting date as the calculation period when calculating the adjustment factor.
If actual data on operations for a type of compulsory insurance for at least three years indicate stable positive financial results for each year for the specified type of insurance and if the amount of insurance premiums (contributions) for this type of insurance is at least 25% of the amount of insurance premiums (contributions) for insurance other than life insurance, then, in agreement with the Federal Financial Markets Service of Russia, the percentage amounts used to calculate the first and second indicators for this type of insurance can be used in amounts less than that provided for in the above Regulations, but not less 2/3 of the established values.
The standard size of the solvency margin of an insurer providing life insurance and non-life insurance is determined by adding the standard size of the solvency margin for life insurance and the standard size of the solvency margin for non-life insurance.
If the standard size of the insurer's solvency margin is less than the minimum amount of the authorized (share) capital established by Art. 25 of the Insurance Law, then the legally established minimum amount of the authorized capital is taken as the standard size of the insurer's solvency margin.
If at the end of the reporting year the actual size of the insurer's solvency margin exceeds the standard size of the solvency margin by less than 30%, the insurer submits for approval to the Ministry of Finance of the Russian Federation as part of the annual financial statements financial recovery plan. This plan may include changing the size of the authorized capital, expanding reinsurance operations, changing the tariff policy, reducing accounts receivable and payable, changing the structure of assets, as well as the use of other methods of maintaining solvency that do not contradict the legislation of the Russian Federation.
The ratio between the actual and standard solvency margins is calculated by the insurer on a quarterly basis.
One more an important condition ensuring the financial stability of insurance organizations is use of the reinsurance system.
Transferring part of the risks to reinsurance allows us to solve a number of important problems, including stabilization of the insurer’s performance results over a long period in the event of negative results for the entire insurance portfolio throughout the year; expanding the scale of activity (taking on a large number of risks) and increasing competitiveness; protection of your own assets under unfavorable circumstances. However, the insurance organization must evaluate economic efficiency of this decision.
The advantage of reinsurance is that the insurer, reinsuring the risks assumed, creates additional guarantees of its financial stability. Consequently, the policyholder receives additional confidence in full and timely compensation for damage.
The financial stability of insurance operations is understood as the constant balancing or excess of income over expenses in the insurance fund, formed from insurance contributions (premiums) paid by policyholders.
The basis for the financial stability of insurers is the presence of their paid-up authorized capital, insurance reserves, and a reinsurance system.
The problem of ensuring financial stability is considered in two ways: as determining the degree of probability of a shortage of funds in any year and as the ratio of income to expenses for the past tariff period.
1) To determine the degree of probability of a shortage of funds, the coefficient of Professor F.V. Konyshin is used (K) =
Where T - average tariff rate for the insurance portfolio;
P - number of insured objects.
The lower the coefficient TO, the higher the financial stability of the insurer.
Example 2. Assessing the shortage of funds using Professor Konshin's coefficient
Initial data:
a) insurance company A has an insurance portfolio consisting of 550 concluded contracts (n = 550), for insurance company B - out of 450 (n = 450);
1
Solution. We determine Professor Konshin’s coefficient:
1) for insurance company A
KA = 
= 0,050;
for insurance company B
KB = 
= 0,053.
Conclusion: financial stability in terms of deficit of funds of insurance company A is higher than that of insurance company B (KA< КБ).
2) To assess financial stability as the ratio of income to expenses for the tariff period, use the financial stability coefficient of the Ksf insurance fund
Ksf = 
;
Where D- the amount of income for the tariff period;
3F - the amount of funds in reserve funds at the end of the tariff period;
R- the amount of expenses for the tariff period.
The higher the value of the insurance fund stability coefficient, the higher the financial stability of insurance operations.
Example 3.
1. Insurance company A has income of 200 million rubles. The amount of reserve funds at the end of the tariff period is 50 million rubles. The amount of expenses is 120 million rubles, the costs of conducting the case are 5 million rubles.
2. Insurance company B has income of 250 million rubles. The balance of funds in reserve funds is 90 million rubles. The amount of expenses is 280 million rubles, the costs of conducting the case are 10 million rubles.
Solution. We determine the financial stability coefficient of the insurance fund:
Conclusion: insurance company A is financially more stable than insurance company B.
Solvency of the insurer and determination of the standard ratio of assets and insurance liabilities assumed by it
The main sign of the financial stability of insurers is their solvency.
Solvency - This is the ability of the insurer to timely fulfill monetary obligations stipulated by law or contract to policyholders.
Solvency guarantees:
1) compliance with regulatory relationships between assets and accepted insurance liabilities;
2) reinsurance of the risks of fulfilling relevant obligations that exceed the possibility of their fulfillment by the insurer at the expense of its own funds and insurance reserves;
3) placement of insurance reserves by insurers on the terms of diversification, repayment, profitability and liquidity;
4) availability of own capital.
In accordance with the order of the Ministry of Finance of the Russian Federation dated November 2, 2001 No. 90N “On approval of the regulation on the procedure for calculating by insurers the standard ratio of assets and accepted insurance liabilities,” insurers are required to comply with the standard ratio of assets and assumed liabilities, i.e. the actual amount of free assets insurance organization (actual solvency margin) should not be less than the regulatory margin. Insurers are required to calculate the solvency margin quarterly. The actual solvency margin is calculated as the sum of the authorized (share), additional and reserve capital, retained earnings of previous years and the reporting year, reduced by the amount:
Uncovered losses of the reporting year and previous years;
Debts of shareholders (participants) for contributions to the authorized (share) capital;
Own shares purchased from shareholders;
Intangible assets;
Receivables that have expired.
The standard size of the solvency margin of a life insurance insurer is equal to the product of 5% of the life insurance reserve and the adjustment factor.
The adjustment factor is defined as the ratio of the life insurance reserve minus the share of reinsurers in the life insurance reserve to the value of the specified reserve.
If the correction factor is less than 0.85, for calculation it is taken equal to 0.85.
The standard size of the solvency margin for insurance other than life insurance is equal to the largest of the following two indicators, multiplied by the adjustment factor.
The first indicator is 16 % of the amount of insurance premiums (contributions) accrued under insurance contracts, co-insurance and contracts accepted for reinsurance, for the billing period, reduced by the amount:
Insurance premiums (contributions) returned to policyholders (reinsurers) in connection with the termination (change of conditions) of insurance contracts, co-insurance and contracts accepted for reinsurance for the billing period;
Deductions from insurance premiums (contributions) under insurance contracts, coinsurance to the reserve of preventive measures for the billing period;
Other deductions from insurance premiums (contributions) under insurance contracts, coinsurance in cases provided for by current legislation, for the billing period.
The calculation period for calculating this indicator is the year (12 months) preceding the reporting date.
The second indicator is 23% from one third of the amount:
Insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance, minus the amounts of proceeds associated with the implementation of the right of claim transferred to the insurer, which the insured has against the person responsible for losses compensated as a result of insurance, for the estimated period;
Changes in the reserve of declared but unresolved losses, and the reserve of occurred but undeclared losses under insurance contracts, co-insurance and contracts accepted for reinsurance, for the billing period.
The calculation period for calculating this indicator is 3 years (36 months) preceding the reporting date.
The correction factor is defined as the ratio of the sum:
Insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance, minus the accrued share of reinsurers in insurance payments for the billing period;
Changes in the reserve of declared but unresolved losses under insurance contracts, co-insurance and contracts accepted for reinsurance, minus changes in the share of reinsurers in the specified reserves for the billing period to the amount (not excluding the share of reinsurers):
Insurance payments actually made under insurance contracts, co-insurance and accrued under contracts accepted for reinsurance for the billing period;
Changes in the reserve of declared but unresolved losses, and the reserve of occurred but undeclared losses under insurance contracts, co-insurance and contracts accepted for reinsurance for the billing period.
The calculation period is the year (12 months) preceding the reporting date.
If the correction factor is less than 0.5, then for calculation purposes it is taken equal to 0.5, if more than 1, it is taken equal to 1.
The standard size of the solvency margin of an insurer providing life insurance and non-life insurance is determined by adding the standard size of the solvency margin for life insurance and non-life insurance.
If at the end of the reporting year the actual size of the insurer's solvency margin exceeds the normative one by less than 30%, the insurer submits for approval to the Ministry of Finance of the Russian Federation as part of the annual financial statements a plan for improving the financial position.
Example 4. Calculate the ratio between the actual and standard amounts of the solvency margin for insurance company K.
To calculate the actual solvency margin, we use data from the insurer’s balance sheet as of the last reporting date (million rubles):
Authorized capital………………………………………………………………30
Reserve capital................................................ ................................2.5
Uncovered losses of the reporting year and previous years....................0.5
Company shares purchased from shareholders..................................1.5
Intangible assets................................................ ...........................0.3
Receivables that have expired 0.7
Solution.
1. Determine the actual solvency margin:
30 + 2 + 2.5 – 0.5 – 1.5 –0.3 –0.7 = 31.5 million rubles.
To calculate the standard solvency margin for life insurance, we use the following balance sheet data (million rubles):
The amount of the life insurance reserve as of the calculation date 206 The share of reinsurers in the life insurance reserve 23
2. Calculate the correction factor: 
= 0,888
3. We determine the standard size of the solvency margin for life insurance:
0.05 206 0.888 = 9.146 million rubles.
Let's calculate the standard size of the solvency margin for insurance other than life insurance.
When calculating the first indicator, we use the following balance sheet data (million rubles):
Amount of insurance premiums for insurance other than life insurance.................................... 110
Refund of insurance premiums due to termination (change of conditions)
contracts for the year preceding the settlement date. ........................................................ ............5
Deductions from insurance premiums to the reserve | preventive measures
for the year preceding the calculation date. ........................................................ ............................... 4
Other deductions from insurance premiums for the year preceding the date of calculation……1
4. We determine the first indicator for calculating the solvency margin:
0.16 (110 – 5 –4 –1) = 16 million rubles.
To calculate the second indicator, we use the following balance sheet data (million rubles):
Insurance payments for the three years preceding the date of calculation, by type
insurance other than life insurance…………………………………………..252
Receipts related to the exercise of the insurer's right to subrogation for three years,
preceding the reporting date................................................................... ........................................................ ..50
Reserve for declared but unresolved losses:
At the beginning of the three-year billing period……………………………………….20
As of the settlement date................................................... ........................................................ ......................32
At the beginning of the three-year billing period................................................... ..........................14
As of the settlement date................................................... ........................................................ .......................13
5. We determine the second indicator for calculating the solvency margin:
252 – 50 – 20 + 32 – 14 + 13
0.23 --------------- = 16.33 million rubles.
Let's calculate the correction factor based on the following data (million rubles):
Insurance payments for types of insurance other than life insurance,
for the year preceding the date of calculation………………………60
Reserve for declared but unresolved losses:
At the beginning of the accounting year................................................... ..........26
As of the settlement date………………………………………….....30
Reserve for occurred but unreported losses:
At the beginning of the accounting year…………………........................15
At the end of the billing period………………......................13
Subtotal:
60 – 26 + 30 – 15 + 13 = 62 million rubles. -
Share of reinsurers in insurance payments…………………………..25 Share of reinsurers in the reserve of declared but unresolved losses:
at the beginning of the billing period…………………………….7
At the end of the billing period…………………………….13
Share of reinsurers in the reserve of occurred but unreported losses:
At the beginning of the billing period……………………………4
At the end of the billing period……………………………3 Subtotal:
25 – 7 +13 – 4 + 3 = 30.0 million rubles.
6. The correction factor is: 
= 0,516
Let us make the final calculation of the regulatory solvency margin for insurance other than life insurance:
a) the indicator accepted for calculating the solvency margin (the largest of the values obtained when calculating the first and second indicators) - 16 million rubles;
b) correction factor - 0.516.
7. The standard solvency margin for insurance other than life insurance will be
16 0.516 = 8.256 million rubles.
Based on the obtained indicators, we will calculate the overall regulatory solvency margin:
8. The total regulatory solvency margin is equal to 9.146 + 8.256 = 17.402 million rubles.
9. The deviation of the actual solvency margin from the normative one will be
31.5 – 17.402 = 14.098 million rubles.
10. Determine the percentage of excess of the actual solvency margin:
100
= 81,02%
Conclusion: the insurer maintains the relationship between the actual and standard solvency margin, which indicates its financial stability.
Problems to solve independently
Task 1. Determine the financial result for the insurance organization from providing insurance other than life insurance.
Initial data from the financial results report for the year (thousand rubles):
Insurance premiums…………………………………......4913
Increase in the reserve of unearned bonuses………….....821
Paid damages…………………………………………...1023
Reducing loss reserves……………………………..45
Contributions to the preventive measures reserve…..96
Contributions to fire safety funds…………..…38
Costs of conducting insurance operations………………1377
Task 2. Determine the result from insurance operations other than life insurance, as well as the profitability of insurance operations and the payout ratio according to the financial results report for the reporting year of the insurance organization (thousand rubles):
Insurance premiums - total………………….....139,992
Of these transferred to reinsurers…………………..……….105135
Increase in the unearned premium reserve:
Total…………………………………………………………….40583
Increasing the share of reinsurers in the reserve…………………..25333
Accrued losses - total……………………………………...10362
Share of reinsurers…………………………………………...7286
Contributions to the reserve for preventive measures…………...3710
Contributions to fire safety funds…………..………..….949
Expenses for conducting insurance operations………………………….2561
Task 3.
Authorized capital………………………………................................24
Extra capital................................................ ...............................2
Uncovered losses of the reporting year and previous years....................0.9
Company shares purchased from shareholders..................................1.7
Intangible assets................................................ ...................2.4
Receivables that have expired 0.8
Task 4. Determine the result from life insurance operations, as well as the level of payments according to the financial results report for the reporting year of the insurance organization (thousand rubles)
Insurance premiums…………………………...………......1,848,658
Investment income……………………………………………………71,842
including:
Interest receivable……………………………..…71,842
Paid damages………………………………………….1 538571
Increase in life insurance reserve………………509,588
Expenses for conducting insurance operations……………………3470
Task 5. Swipe assessment of the shortage of funds using the coefficient of Professor F.V. Konshina
Initial data:
a) insurance company A has an insurance portfolio of 500 concluded contracts, insurance company B has 400;
b) insurance company A has an average tariff rate of 3.5 rubles. from 100 rub. insurance amount, for insurance company B - 4.0 rubles. from 100 rub. insurance amount. 1
Task 6. Determine the degree of probability of a shortage of funds using the coefficient of Professor F.V. Konshin, and draw your own conclusions.
Initial data:
a) insurance company A has an insurance portfolio of 850 concluded contracts, insurance company B has 650;
b) insurance company A has an average tariff rate of 3 rubles. from 100 rub. insurance amount, for insurance company B - 3.5 rubles. from 100 rub. insurance amount. 1
Initial data(million rubles):
Task 8. Assess the financial stability of insurance companies based on the stability of the insurance fund using the following data:
1. Insurance company A has income of 110.5 million rubles. The amount of reserve funds at the end of the tariff period is 85.0 million rubles. The amount of expenses is 86.4 million rubles, the costs of conducting the case are 15 million rubles.
2. Insurance company B has income of 18.7 million rubles. The balance in reserve funds is 16 million rubles. The amount of expenses is 11.4 million rubles, the costs of conducting the case are 1372 thousand rubles.
Task 9. Assess the financial stability of insurance companies based on the stability of the insurance fund using the following data:
1. Insurance company A has income of 112 million rubles. The amount of reserve funds at the end of the tariff period is 85.0 million rubles. The amount of expenses is 84 million rubles, the costs of conducting the case are 13 million rubles.
2. Insurance company B has income of 28 million rubles. The balance of funds in reserve funds is 26 million rubles. The amount of expenses is 9.5 million rubles, the costs of conducting the case are 1155 thousand rubles.
Problem 10. Calculate the ratio between the actual and standard amounts of the solvency margin for insurance company C.
To calculate the actual solvency margin, use data from the insurer’s balance sheet as of the last reporting date (RUB million):
Authorized capital………………………………................................22
Extra capital................................................ ...............................2
Reserve capital................................................ ................................3
Uncovered losses of the reporting year and previous years...................1,2
Company shares purchased from shareholders....................................1.5
Intangible assets................................................ ...................1.4
Receivables that have expired 0.6
Problem 11.
1. Loss from life insurance operations…………………………127,659
2. Profit from non-life insurance operations....136,723
Investment income……………………………………………………1,092
Administrative expenses…………………………………………………………......8,971
Other income………………………………………………………………………………...16
Income tax……………………………………………………………..288
Extraordinary expenses………………………………………………………..88
Define:
3) net profit.
Problem 12. The following data is available from the financial performance report of the insurance organization for the reporting year (thousand rubles):
1. Loss from life insurance operations…………………………157,666
2. Profit from non-life insurance operations....126,777
3. Other income and expenses not included in sections 1.2:
Investment income……………………………………………………1,022
Administrative expenses……………………………………………………………....…6,991
Other income………………………………………………………………………………...26
Income tax……………………………………………………………..385
Extraordinary expenses………………………………………………………….6
Define:
1) profit before tax;
2) profit from ordinary activities;
3) net profit.
Introduction 3
1. Legal basis ensuring the financial stability of insurers 5
2. Requirements for the financial stability of insurers 9
3. Financial management stability of the insurance company 13
4. Investment policy of the insurer 26
Conclusion 33
References 34
Introduction
The basis for the financial stability of insurers is the presence of their paid-up authorized capital and insurance reserves, as well as a reinsurance system.
The minimum amount of paid authorized capital formed at the expense of Money, on the day a legal entity submits documents to obtain a license to carry out insurance activities there must be at least 25 thousand minimum wages when carrying out types of insurance other than life insurance, at least 35 thousand minimum wages when carrying out life insurance and other types of insurance , not less than 50 thousand minimum wages when conducting exclusively reinsurance.
Insurers are required to comply with the laws and regulations of the authority insurance supervision requirements for financial stability in terms of the formation of insurance reserves, the composition and structure of assets accepted to cover insurance reserves, reinsurance quotas, the regulatory ratio of the insurer’s own funds and assumed liabilities, the composition and structure of assets accepted to cover the insurer’s own funds, as well as the issuance of bank guarantees.
The insurer may transfer the obligations assumed by it under insurance contracts (insurance portfolio) to one insurer or several insurers (replacement of the insurer) that have licenses to carry out those types of insurance for which the insurance portfolio is transferred, and have sufficient own funds, that is, meeting the solvency requirements taking into account the newly assumed obligations. The transfer of the insurance portfolio is carried out in the manner established by the legislation of the Russian Federation.
Target course work consider the legal basis for the financial stability of insurers and the basic requirements for the financial stability of insurers.
1. Legal basis for ensuring the financial stability of insurers
The financial stability of the insurer should be understood as its unconditional ability to fulfill obligations to make insurance payments in favor of the policyholder or beneficiary. It is the financial stability of the insurance company that is the main object of control by the insurance supervisory authorities. Such control is carried out by checking financial statements and compliance with established indicators characterizing the solvency of insurers.
According to current legislation, guarantees of the financial stability and solvency of the insurer are:
· paid authorized capital is not lower than the amount established by law;
· insurance reserves, calculated in accordance with the established procedure and guaranteeing insurance payments;
· reinsurance system;
· compliance with the normative ratio between assets and liabilities, reflecting the availability of the insurer's own funds free from any obligations;
· compliance with the maximum liability standard for accepting a particular risk for insurance
A sufficient size of the authorized capital guarantees the fulfillment of the obligations of the insurance company at the initial stage of its activities, since the receipt of insurance premiums during this period is insignificant and the authorized capital is the only guarantee of the solvency of the company. Therefore, the minimum amount of authorized capital required at the beginning of the activity of an insurance company is established by law. However, a significant authorized capital is also important for existing insurance companies, as it allows, if necessary, to expand the scope of activity, and also serves as a stabilization reserve.
The minimum amount of the paid authorized capital, formed from funds, on the day a legal entity submits documents to obtain a license to carry out insurance activities must be at least 25 thousand minimum wages (minimum wages) - when carrying out types of insurance other than life insurance, not less than 35 thousand minimum wages - when carrying out life insurance and other types of insurance, not less than 50 thousand minimum wages - when carrying out exclusively reinsurance. The minimum amount of paid authorized capital, formed from funds on the day of submitting documents for obtaining a license to carry out insurance activities by an insurance organization that is a subsidiary of a foreign investor or has a share of foreign investors in its authorized capital of more than 49 percent, must be at least 250 thousand minimum wages, and when carrying out exclusively reinsurance - at least 300 thousand minimum wages.
Insurance reserves reflect the amount of the insurer's unfulfilled obligations for insurance payments at a given time. The obligation of insurers to form insurance reserves is enshrined in the Law on the Organization of Insurance Business. Insurance reserves are calculated for each type of insurance. Their size is determined as a result of a thorough analysis of the insurer's operations, based on labor-intensive mathematical calculations. Practice shows that with experienced and qualified specialists, such a calculation becomes quite reliable and knowledge of its results can largely protect the insurer from possible bankruptcy.
Reinsurance means the transfer by the insurer (referred to as the direct insurer, the first insurer, the reinsurer) of the assumed liability under the insurance contract to another insurer (referred to as the second insurer or reinsurer) in a part exceeding the permissible amount of its own deduction. With the help of reinsurance, stability and uniformity of the insurance portfolio are achieved. The obligation to reinsure obligations that exceed the ability to fulfill them at the expense of own funds and insurance reserves is enshrined in the Law on the Organization of Insurance Business. The relationship between the insurer and the reinsurer arises by virtue of a reinsurance agreement, which determines the method of reinsurance, the obligations of the parties, the conditions for the occurrence of the reinsurer's obligation to participate in the insurance payment and other necessary conditions for providing guarantees for the fulfillment of the reinsurer's obligations to the insurer.
The policyholder's consent to such a transfer of liability is not required, since no legal relationship arises between the policyholder and the reinsurer during reinsurance. The direct insurer is fully liable to the policyholder for compensation for possible damage.
In accordance with current legislation, insurers are required to comply with the normative ratio between assets and liabilities. The methodology for calculating this ratio and the established mandatory amount of free assets (funds) for the company are established by the Federal Insurance Supervisory Authority.
To ensure the solvency of insurers, it is also necessary to comply with the maximum liability standard for insuring a particular risk
At the same time, the solvency of the insurer is significantly influenced by its investment policy and allocation of assets (or funds covering both insurance reserves and authorized capital). Indeed, let’s imagine that an insurance company has correctly calculated insurance reserves, has free assets in the established amount, has entered into reinsurance agreements for large risks, but has invested funds in the deposits of an unreliable bank or investment institution. The inability to provide insurance payments to such an insurer may be due to the bankruptcy of the bank and the inability to use the funds transferred to it. In order to minimize the risk of investing those funds of the insurer that are directly related to the fulfillment of obligations for insurance payments - in the amount of insurance reserves, the Federal Insurance Supervisory Authority has the right to establish a special regime for investments carried out by the insurer: prohibit certain types of investments, set maximum and (or) minimum quotas from the total amount of investments that can be used to purchase certain types of securities, deposits, real estate, currency values, etc.
Minimum conditions for ensuring the financial stability of insurers:
1. The insurer is obliged to ensure its own financial stability. The minimum conditions for ensuring financial stability include: the presence of the required amounts of equity capital and insurance reserves, compliance with the minimum obligations of the insurer under a separate contract and compliance with other mandatory norms and limits established by the authorized government body.
2. The equity capital of the insurer is defined as the value of all assets of the insurer minus the amount of insurance reserves and other liabilities (accounts payable) of the insurer.
Methods for determining the volume of insurers' assets are established by the authorized government body.
3. Insurance reserves are formed from insurance payments. The procedure and size of the formation of insurance reserves are established by the authorized state body.