Letter from the Department of Insurance Supervision of the Ministry of Finance of the Russian Federation

The Department of Insurance Supervision reports: in connection with the elimination of violations of the current legislation that served as the basis for suspension of the license, by order of the Ministry of Finance of the Russian Federation No. 171 dated 09/07/98:

1. The license for the right to carry out insurance activities of the insurance organization has been renewed:

Renewal of the license means the lifting of restrictions on the activities of the insurance organization.

2. For failure to comply with instructions given by Rosstrakhnadzor and the Department of Insurance Supervision of the Ministry of Finance of the Russian Federation:

2.1. licenses for the right to carry out insurance activities of insurance organizations have been suspended:

Suspension of a license means a prohibition, until the violations are eliminated, from concluding new insurance contracts and renewing existing ones for all types of insurance activities (or types of insurance) for which a license has been issued. Under previously concluded insurance contracts, the insurer fulfills its obligations before their expiration.

2.2. The licenses for the right to carry out insurance activities of the following insurance organizations were revoked:

Revocation of a license means a ban on carrying out insurance activities, with the exception of fulfilling obligations assumed under existing insurance contracts. In case of revocation of a license, the insurance organization is excluded from the unified State Register of insurers and associations of insurers.

1. The Department of Insurance Supervision (hereinafter referred to as the Department) is a structural unit of the Ministry of Finance of the Russian Federation (hereinafter referred to as the Ministry), which, together with territorial insurance supervision bodies, ensures the implementation, within its competence, of the functions of state supervision over insurance activities assigned to the Ministry.

2. The Department carries out its activities in cooperation with structural divisions of the central apparatus of the Ministry and organizations subordinate to it, territorial bodies of the Ministry, federal executive authorities, executive authorities of constituent entities of the Russian Federation, local government bodies, public associations and other organizations.

3. In its activities, the Department is guided by the Constitution of the Russian Federation, federal constitutional laws, federal laws, decrees and orders of the President of the Russian Federation, decrees and orders of the Government of the Russian Federation, Regulations on the Ministry of Finance of the Russian Federation, approved by the Decree of the Government of the Russian Federation of March 6, 1998. N 273, orders, instructions and other regulatory legal acts of the Ministry, as well as these Regulations.

4. The main objectives of the Department are:

4.1. Carrying out, within its competence, state supervision of insurance activities in the Russian Federation in order to comply with the requirements of the legislation of the Russian Federation on insurance, effective development of insurance services, protection of the rights and interests of policyholders, insurers, other interested parties and the state.

4.2. Ensuring, in accordance with the established procedure, licensing of the activities of insurance organizations.

4.3 Providing methodological guidance for accounting, statistical accounting and reporting of insurers.

4.4. Participation in interaction with international organizations in the field of regulation of insurance activities.

5. In accordance with the assigned tasks, the Department performs the following main functions:

5.1. Develops the conditions and procedure for licensing, carries out licensing of insurance activities on the territory of the Russian Federation in accordance with the legislation of the Russian Federation, prepares relevant proposals for the leadership of the Ministry, including on the issuance of licenses, as well as on the limitation, suspension and revocation of licenses.

5.2. Develops regulatory, instructional and methodological documents on insurance and reinsurance issues, including on the formation and placement of insurance reserves, accounting and statistical accounting and reporting of insurance organizations.

5.3. Maintains, in accordance with the legislation of the Russian Federation, a unified State register of insurers, associations of insurers, as well as a register of insurance brokers. Participates in the creation, implementation and maintenance of an information and analytical system of these registers in interaction with the relevant structural divisions of the Ministry.

5.4. Monitors the validity of insurance rates, the formation of insurance reserves of insurers, the compliance of their investment activities with established requirements, the solvency of insurers and other indicators of their financial condition. Develops proposals on indicators of solvency and financial stability of insurers, requirements for their compliance.

5.5. Manages the activities and controls the work of territorial insurance supervision inspectorates, determines their functions, and also, together with the Department of Personnel and Educational Institutions, ensures the selection of personnel for them.

5.6. Analyzes and summarizes reports from territorial insurance supervisory authorities on the work done and develops proposals for its improvement.

5.7. Organizes advanced training for employees of the Department and territorial inspections of insurance supervision in the prescribed manner.

5.8. Develops conditions and procedures for registration of insurers, insurance brokers, and associations of insurers.

5.9. Processes and analyzes information on the state of the insurance market in the Russian Federation.

5.10. Summarizes the practice of insurance activities, the application of insurance legislation, the organization and functioning of the insurance market, develops and presents to the leadership of the Ministry analytical materials and proposals for improving the insurance business in the Russian Federation.

5.11. Develops and submits, in accordance with the established procedure, proposals for the development and improvement of the legislation of the Russian Federation, including insurance auditing.

5.12. Analyzes and summarizes information on the organization of work, forms and methods of state regulation of insurance activities abroad, as well as the activities of relevant international organizations.

5.13. In accordance with the established procedure, takes part in the work of permanent government and interdepartmental commissions on issues within the competence of the Department.

5.14. Participates in communications with insurance supervisory authorities in the Commonwealth of Independent States, foreign countries, as well as with international organizations on insurance supervision issues, studies the experience of foreign countries and develops proposals for its practical application, and participates in the established manner in the work of international organizations on insurance issues.

5.15. Complies with the secrecy regime of work carried out in the Department, including when processing documents that constitute state secrets using technical means.

5.16. Ensures the prompt and correct conduct of office work in accordance with the Instructions for general office work in the central office of the Ministry.

5.17. Carrying out, together with the Committee of the Russian Federation on Financial Monitoring and other federal executive authorities, the functions arising from the regulatory legal acts of the Russian Federation in the field of combating the legalization (laundering) of proceeds from crime and the financing of terrorism.

6. The department has the right:

6.1. Request and receive, in the prescribed manner, reports on insurance activities, information on the financial position of insurers, receive information necessary to ensure supervisory functions from institutions and organizations, including banks, as well as citizens.

6.2. Participate directly and jointly with territorial insurance supervision authorities in inspections of insurers’ compliance with the requirements of the legislation of the Russian Federation on insurance and the reliability of the reports and information they provide.

6.3. Prepare opinions on the documents necessary for issuing licenses to conduct insurance activities on the territory of the Russian Federation, on materials submitted for registration of associations of insurers, as well as for making decisions on the limitation, suspension, revocation and restoration of these licenses, give mandatory instructions to insurance organizations , orders to eliminate violations identified in their activities.

(see text in the previous edition)

6.4. Prepare materials for filing a claim with the arbitration court for the liquidation of the insurer in the event of repeated violations of the legislation of the Russian Federation by the latter, as well as the liquidation of organizations providing insurance without a license.

6.5. Prepare materials for the recovery in a claim from persons charged with the obligation of insurance of amounts unjustifiably saved to the income of the Russian Federation and the accrual of interest on these amounts in the prescribed manner.

6.6. Request and receive, in accordance with the established procedure, from structural units of the central apparatus of the Ministry and its subordinate organizations, territorial bodies of the Ministry, federal executive authorities, executive authorities of constituent entities of the Russian Federation, institutions and organizations, documents, certificates and materials necessary to fulfill the tasks assigned to the Department and functions.

6.7. If necessary, involve specialists from these divisions in joint work, in agreement with other structural divisions of the central apparatus of the Ministry.

6.8. Provide messages to the media within the scope of their competence.

6.9 Develop and participate in the development by other departments and departments of the Ministry of draft legal regulations on issues within the competence of the Department.

6.10. Convene and hold meetings on issues within the competence of the Department, attract, in the prescribed manner, to participate in them employees of structural divisions of the central apparatus of the Ministry, subordinate organizations, and territorial bodies of the Ministry.

6.11. Take part in meetings, scientific and practical conferences, and other similar events on issues within the competence of the Department.

7. The department is headed by a director appointed and dismissed by the Minister of Finance of the Russian Federation.

7.1. The Head of the Department is personally responsible for the implementation of the tasks assigned to the Department and the implementation of its functions.

7.2. The Head of the Department has deputies who are appointed and dismissed by the Minister of Finance of the Russian Federation.

7.3. The distribution of responsibilities between the head of the Department and deputy heads of the Department is carried out by the head of the Department.

7.4. Other employees of the Department are appointed and dismissed in accordance with the established procedure.

7.5. The range of official duties of the Department's employees is determined in accordance with the regulations on departments and job descriptions approved in the prescribed manner.

8. Head of the Department:

8.1. Manages all activities of the Department on the basis of unity of command, organizes its work, establishes and distributes rights and responsibilities among employees of the Department.

Insurance is a legal contract. In it, the insurer undertakes to assume the possible risks of the other party - the insured. All legal relations between the insurer and the policyholder must be documented in the form of an agreement.

To ensure that the client receives the amount when an insured event occurs, there is special government supervision over the work of all insurance companies. And it is precisely in these activities that must be licensed. What is supervision, and what are its functions?

Insurance supervision in Russia

Assumes the risks specified in the contract, under certain conditions and for a certain fee. In order not to go bankrupt, every company must have actuaries - those employees who calculate the degree of probability of a particular event. Actuaries must have the necessary qualifications.

Income from policy purchases must cover expenses so that the organization continues to be solvent and fulfill its functions in the country’s economy. In addition, some types of insurance are mandatory in Russia. For example, insurance for notary practice.

By purchasing a policy, policyholders are fully protected from the consequences of a possible disaster. In all countries of the world, insurance agencies accumulate significant sums. And the fulfillment of their obligations must be closely monitored.

If the client does not receive compensation for losses or receives less than the amount specified in the contract, trust in such organizations is lost.

Who supervises insurance organizations?

During the transition to a market economy in the harsh 90s, when the state structure was being rebuilt, the functions of supervision over insurance agencies and private insurance services since 1996 were performed by the Department of Supervision under the Ministry of Finance. Since 2004, all supervisory powers have been transferred to the Federal Service of the Ministry of Finance.

In 2011, the FSSN was abolished. The functions of the FSSN were performed by the FS for Fin. markets and the Bank of the Russian Federation. At the moment (since 2013), all these functions for supervision of insurers are performed by the Insurance Market Department under the Central Bank of the Russian Federation.

Legislation regulating insurance and supervision of the insurance business

How supervision is regulated in the Russian Federation is carried out on the basis of Chapter 48 Part 2 of the Civil Code. Licensing is carried out under the conditions established by Order No. 02-02/08. And health insurance is subject to the Law “On Health Insurance” dated June 29, 1991.

Insurance supervision functions

Insurance supervision in the Russian Federation as an integral system performs the following most important functions:

• The department monitors compliance with insurance legislation.
• Conducts certification of actuaries.
• Issues or revokes licenses.
• Ensuring a unified state policy.
• Rule-making function.
• Control of insurance business entities. Preventing their bankruptcy.

Of course, one of the main functions is to protect the rights of policyholders. The Department also issues permission to insurance agencies to increase their authorized capital or permission to open a branch of an agency with foreign investment in Russia.

In addition, an important point is state control of the insurance market in order to prevent a monopoly in this market. The Antimonopoly Committee also constantly monitors insurers.

Principles of insurance supervision

The insurance supervisory authority is vested with certain powers. He has the full right to conduct an inspection and administratively punish those responsible or start a case in court. But the supervisory authority itself is also subject to certain principles, since it is also a subordinate structure.

Insurance supervision is carried out on the principles:

1. Legality. All government bodies and all officials are subject to the laws established by the state.
2. Organizational unity. Both the territorial branches and the central one act as a single whole.
3. Glasnost. The principle means that all information about the activities of the Department is publicly available. It is published on the Internet for the general public so that everyone has access to the information. Also, each insurance company is simply obliged to provide the public with its financial indicators for analysis of their competitiveness. True data regarding the financial condition of the insurance company will help the policyholder navigate his choice if he has not yet decided which company he should contact.

Thus, the Department can control the insurance business in Russia and ensure that all entities comply with the same legal requirements, and policyholders invest money calmly and without worry.

The purpose of insurance supervision in Russia

The state and the main market players must “hear” each other and work together. This is in the interests of both parties. Therefore, insurance supervision involves the Department setting the following goals:

• Generating interest among potential consumers of insurers' services.
• Further construction of the state supervision system
• Guaranteeing that insurers fulfill their obligations to issue money
• Formation of insurance.
• Training of new personnel.
• Creating conditions for investing in the insurance industry.

All the control measures taken by the insurance supervision of the Russian Federation contribute to the development of the insurance market.

It should be noted that this control also regulates the activities of foreign companies and companies with a predominant share of foreign capital. The insurance market in the Russian Federation must be civilized, which means that tax policy for insurance companies must be improved.

How is insurance activity supervised?

The Department's activities are carried out through the creation of regulations and monitoring their implementation.

Insurance supervision in the Russian Federation can influence the market in the following ways:

• clarifies some issues that fall within the competence of the insurance supervisory authority;
• provides information from the unified register of insurance entities or the register of various associations of insurance entities;
• acts on control of the validity of a license for insurance activities;
• acts of license revocation.

Supervision is aimed primarily at the development of the insurance business; it is not carried out with the aim of impeding it. Therefore, such control is carried out in the interests of both the clientele and the insurance agency itself.

Responsibility of the parties in accordance with the laws of the Russian Federation

For violation of the conditions described in the contract, both parties (the insurer and the policyholder) bear full responsibility. The policyholder is protected by the Consumer Protection Law. For violation of rights, the consumer of insurance services has the right to demand moral damages.

The insurer may not pay compensation in the case where the client of the insurance company is to blame for the event. After all, for the laws of the Russian Federation, all market entities are equal.

There is also a provision that says that an individual who is required by law to have insurance but is not insured can be subpoenaed. All relations of these subjects are covered in more detail in Chapter. 48 “Insurance” of the Civil Code.

Topic 3. Organization of insurance business. The main participants in insurance relations and insurance intermediaries.

Question 4. Licensing of insurance organizations.

Insurance in questions and answers: textbook. allowance / M.M. Ardatova, V.S. Balinova, A.B. Kuleshova, R.Z.Yablukova. – M.: TK Welby, Prospekt Publishing House, 2006. -296 p. (pp. 74-81, abbreviated)

3.5. Licensing and taxation of insurance activities

What is insurance licensing?

Licensing of insurance operations of insurers operating in Russia is carried out by the Department of Insurance Supervision of the Ministry of Finance of the Russian Federation and is mandatory.

Licenses are issued for the provision of property liability insurance, voluntary and compulsory personal insurance, as well as reinsurance, indicating specific types of insurance that the insurer has the right to carry out.

The general provisions on licensing, the composition of the license, license holders, the procedure for issuing a license to conduct insurance activities, control over the use of the license are set out in the Conditions for licensing insurance activities on the territory of the Russian Federation dated October 12, 1992 N 2 02-02/4 (as amended and additional dated November 22, 1993).

The order of Rosstrakhnadzor approved the Regulations on the procedure for issuing orders, restrictions, suspension and revocation of a license to carry out insurance activities dated June 26, 1995 No. 02-02/03 and dated August 10, 1994 No. 2 02-02/14.

A license is issued to carry out strictly specified types of insurance. It can be issued for insurance activities both throughout the country and within individual regions. As a rule, a license does not have a validity period, but in some cases insurers are issued a temporary license, which specifies its validity period.

The Department of Insurance Supervision is obliged to issue a license within 60 days from the date of receipt of all necessary documents, and in case of refusal to issue a license, within the same period, inform the insurance organization about the reasons for the refusal.

What does an insurer need to obtain a license?

To obtain a license, the insurer must have an authorized capital (on the day of submission of documents), paid from funds in the amounts established by law. In the event that an insurance organization applies for the first time to obtain a license to conduct insurance activities, the paid authorized capital and other own funds of the insurance organization must ensure the implementation of planned types of insurance activities and the fulfillment of obligations assumed by the insurer under insurance contracts.

Insurers carrying out insurance activities on the basis of a previously obtained license, when applying for a license for new types of insurance activities, must meet the following requirements:

1) ensuring financial stability and meeting the standard ratio of assets and liabilities on the last reporting date according to the balance sheet data, confirmed by the auditor’s report;

2) a business plan for the year should be drawn up based on the increase in own funds necessary for the development of new types of insurance;

H) lack of effective sanctions for violation of the law.

To obtain a license to carry out insurance activities, a registered insurer must present the following documents:

1) rules and conditions of insurance by type of operation; certificates from banks or other institutions that confirm the presence of an authorized capital, reserve or similar funds;

2) a program for the development of insurance operations for three years, which includes the types and volumes of planned operations, maximum liability for individual risk, conditions for organizing reinsurance protection;

3) statistical justification of the applied system of tariffs, rates and reserves.

What documents does the insurer receive along with the license?

Upon receipt of a license, the insurer receives the following documents:

1) a license that contains information such as the name of the insurer and its legal address; name of the types of activities to which the insurer has the right; license number and date of issue;

2) an annex to the license containing a list of specific types of insurance that the insurer has the right to carry out;

3) the structure of insurance tariffs with a note from the insurance supervisory authority;

4) rules for each type of insurance with a note from the insurance supervisory authority.

What documents are required for legal entities to obtain a license to carry out insurance activities?

To obtain a license to carry out insurance activities, legal entities must submit the following documents to the Ministry of Finance of the Russian Federation:

1) application in the established form;

2) documents that confirm payment of the authorized capital: acts of acquisition and transfer of property, a bank certificate, as well as other documents;

3) constituent documents: charter, which is drawn up in accordance with current legislation; minutes of the founding meeting, decision on establishment or constituent agreement; a document that confirms the state registration of a legal entity;

4) insurance rules with attached sample forms of insurance contracts and insurance certificates (policies, certificates);

5) information about the head of the insurance company and his deputies in the prescribed form;

6) economic justification for insurance activities: reinsurance plan (required if the maximum liability for a particular risk under an insurance contract exceeds 10% of the insurer’s own funds); business plan for the first year of activity; plan for the allocation of insurance reserves; regulations on the procedure for the formation and use of insurance funds; calculation of the ratio of assets and liabilities is presented by insurance organizations that have been carrying out insurance activities for at least one year; balance sheet with attached report on financial results as of the last reporting date.

7) calculation of insurance rates with the application of the calculation methodology used, indicating the source of initial data and the structure of tariff rates.

What sanctions does the Department of Insurance Supervision of the Russian Federation have the right to impose on insurance organizations that have violated the requirements of insurance legislation?

The Department of Insurance Supervision of the Russian Federation has the right, when identifying violations by insurers of the requirements of insurance legislation, to impose the following sanctions on the insurer: an order, restriction of a license, suspension of a license, and revocation of a license.

What is a prescription?

An order is a written order from the insurance supervisory authority, which obliges the insurer to eliminate the identified violations within a specified period of time. The grounds for issuing an order are:

1) failure to comply with established requirements for the regulatory relationship between assets and insurance liabilities;

2) failure to comply with the established rules for the formation and placement of insurance reserves;

3) carrying out types of activities that cannot be the subject of direct activities of insurers in accordance with the law;

4) failure to submit documents required by insurance supervisory authorities on time;

5) failure to notify the insurance supervisory body of changes and additions within the prescribed period;

6) establishing the fact that false information was submitted to the insurance supervisory authority;

7) violation of established requirements for reporting to the insurance supervisory authority.

What is the essence of license suspension, limitation of its validity and license revocation?

Suspension of a license is a prohibition for an insurer to enter into and renew insurance contracts for all types of insurance activities for which a license has been issued.

Limiting the validity of a license means prohibiting the insurer from concluding and renewing insurance contracts for certain types of insurance activities or in a certain territory.

Submission by the insurer within the prescribed period of documents that indicate the elimination of violations that served as the reason for limiting or suspending the license serves as the basis for renewing the license.

Revocation of a license is the failure of the insurer to submit these documents within the prescribed period. It entails the termination of the right of a legal entity to carry out insurance activities and the exclusion of the legal entity from the State Register of Insurers.

When making decisions on refusal, suspension and cancellation of licenses, the Department is guided by the conclusion of an expert commission with the mandatory involvement of the licensed organization. Decisions to suspend, restrict or revoke a license, as well as to renew a license, are communicated to the insurer and the relevant tax authority in writing and published in the press. A special fee is charged to the insurer for issuing a license.

What rights does the Insurance Supervision Department have?

The Insurance Supervision Department has the right to carry out the following actions to carry out the tasks assigned to it:

1) receive from insurance organizations the necessary information, certificates and other information that confirms; the reliability of the information received, as well as apply for information to banks and other institutions and organizations;

2) control the placement of temporarily available funds by insurance organizations in order to determine the degree of reliability of investments and liquidity of the assets of these organizations.

3) conduct inspections of individual financial and economic activities of insurance organizations that relate to the current legislation on insurance, established regulations and rules;

4) exercise control over the necessary reserves that are created in insurance organizations to ensure compliance between the obligations assumed by insurance organizations and the funds available to them.

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The activities of insurance organizations are fundamentally different from the activities carried out by other business entities, since they are aimed at ensuring the protection of the property interests of individuals and legal entities from unforeseen circumstances, accidents and natural disasters.

Moreover, each insured event has its own individual characteristics both in terms of the nature and the amount of damage caused. The realization of risk expressed in it becomes in some cases catastrophic in nature, causing large losses of material resources and human casualties. The high share of responsibility of the insurer for the consequences of its activities requires a special organization of state supervision, which cannot be aloof from insurance activities, the interests of the population and the economy as a whole.

In accordance with Art. 30 of the Insurance Law, state supervision of insurance activities is carried out in order to comply with the requirements of the legislation of the Russian Federation on insurance, effective development of insurance services, protection of the rights and interests of policyholders, insurers, other interested parties and the state.

Main functions of the Insurance Supervision Department: issuance of licenses to carry out insurance activities; maintaining a unified State register of insurers and associations of insurers, as well as a register of insurance brokers; control over the validity of insurance rates and ensuring the solvency of insurers; establishing rules for the formation and placement of insurance reserves, indicators and forms for accounting for insurance operations and reporting on insurance activities;

development of normative and methodological documents on issues of insurance activities that are within the competence of the service by law; generalization of insurance practice, development and submission in the prescribed manner of proposals for the development and improvement of insurance legislation; ensuring the transparency of insurance activities (everyone who is professionally engaged in this is obliged to publish complete, truthful and clear information about their financial situation, and the Department must check how reliable the published information is);

In connection with the rapid growth in the number of insurance organizations in Russia, the Government of the Russian Federation adopted Resolution No. 609 *0 of territorial insurance supervision bodies dated June 26, 1993, providing for the creation of territorial insurance supervision bodies (Department Inspections), which have the right to conduct, on behalf of the Department, verification of the accuracy of the information provided insurers provide insurance reporting supervision, monitor compliance with insurance legislation, and receive information from insurers about their financial position.

Taking into account the uneven distribution of insurers throughout Russia, the Department is creating cluster inspections that will serve several territories and regions. The same ones will be created in each republic that is part of the Russian Federation.

In total, 19 cluster inspections have been created in Central Russia and a separate inspection for the Kaliningrad region due to its geographical remoteness. The territorial insurance supervision bodies will be financed from appropriations allocated for these purposes from the republican budget of the Russian Federation. Since the Law on the Organization of Insurance Business in the Russian Federation grants the right to issue licenses only to the Department, territorial insurance supervisory authorities will not have it. As can be seen from the list, the Department of Insurance Supervision not vested with the right to interfere in the operational activities of insurance companies

A special law provides, in the event of a decision to liquidate an insurance company, including due to its bankruptcy, a guarantee of fulfillment of its obligations to policyholders under concluded contracts with compulsory types of insurance by 100% and with voluntary types of insurance by at least 90%. In Russian legislation, including on insurance, more and more freedom is given to entrepreneurship and the issue of liability for failure to fulfill obligations and abuses is addressed to a lesser extent. And the opportunities for business activity that have opened up in our country, including in the insurance sector, are, unfortunately, accompanied by a significant increase in the number of fraudulent attacks. Such illegal actions are committed by both insurers and policyholders.