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Insurance in USA part 3 PDF

Another of the largest insurance groups in the United States – ContinentalCorporation, founded in 1853. Provides insurance services in almost 100 countries. Specializes in reinsurance and transport insurance.

The largest life insurance TNC is ThePrudentialInsuranceCompanyofAmerica, founded in 1873. There are various types of insurance contracts: individual and collective (group) insurance, ordinary life insurance, death insurance with lifetime contributions, insurance with participation in the profits of the company, insurance of pensions, medical expenses, etc. [8]

In the US, an electronic data Bank for all insurance companies is widely used, this makes it possible to distribute companies by risk, size of premiums, etc.

The largest U.S. life insurance companies are taking in the management of multibillion-dollar funds belonging to various pension funds. The task of insurance companies in this case – by a reasonable investment policy to ensure the safety and growth of trust funds. For the management of these funds, insurance companies charge a fee of 0.1% of the amounts taken in the management, which brings millions of dollars in income.

Investment investments have huge value for the American societies for the preservation of life. Huge investment resources turn insurance companies into one of the influential external centers of financial control in relation to industrial corporations.[9]

1.3 regulation of insurance activity. Analysis of anti-crisis measures in regulation

In the United States, there is a special legislative regulation of the insurance business. The fact is that each state has its own insurance legislation and its own regulatory body (supervision). There is no single Federal law on insurance and no single Federal body for supervision of insurance activities. Each state sets its own requirements for the minimum level of capital, types of insurance offered, audits controlled insurance companies, carries out General regulation of insurance activities by issuing licenses to brokers, agents and insurance companies themselves.[10]

The insurance supervisors in the United States focus their attention on the financial stability of insurance companies. In particular, the practice of insurance control bodies and audit services uses a special system of indicators for the financial analysis of insurance transactions.

The indicators of this kind include the coefficients and their dynamics. Each indicator has maximum and minimum permissible limits determined by the legislation on the basis of long-term observations of the activities of financially stable companies, as well as companies that have ever experienced financial difficulties, but have not been recognized as bankrupt.

There are eleven odds in total. The main factors are: the ratio of premiums and net profit, movement bonuses, the ratio of net profit to total reinsurance net profit, two-year overall operating ratio.

If the value of three of the eleven coefficients is beyond the permissible, the company must be taken under the special control of the insurance supervision of the state. Every year, 5% of insurers are closely monitored by the relevant departments of the state.[11]

Along with" planned " inspections by Supervisory authorities, insurance companies each year voluntarily provide them with special reports, which contain absolutely all indicators characterizing the activities of insurers, including calculations of eleven test coefficients. Insurance supervision authorities conduct computer testing of data and individual interviews with the company's management. It should be noted that participation in the system of such supervision is completely voluntary, that is, if the Supreme governing body of the company decides not to participate in the system of financial control, the insurance supervision can only publish special lists of such companies indicating the reasons for their refusal to participate in the system of state control.

Employees of the audit and financial analysis division of the national Association of insurance supervisors annually analyze the coefficient values of all insurance companies in the United States. This procedure was first introduced in 1977. A comparative analysis of the activities of companies whose values of four or more coefficients exceeded the permissible limits in the current year, and companies recognized as financially unstable in previous years was carried out. Currently, due to the frequent cycles of macroeconomic nature (in the insurance business, these are the so-called "soft" and "hard" markets), those companies whose values of two or more coefficients are beyond the permissible limits are also subjected to careful inspection. The financial analyst, based on the results of computer testing, classifies all companies by type- "requiring immediate control" or "requiring selective control" - indicating the main results of the analysis. There are cases when the insurance company values of four or more coefficients are outside the framework defined by law, but the financial analyst does not require the intervention of financial control authorities. In this case, the reasons for such decisions are indicated.[12]

Not all companies with adverse test results can be considered financially unstable. Some of them are subject to inertial trends of previous years, which may affect the values of current coefficients. Others use unusual accounting methods (as we know, there are no strictly statutory accounting methods in the US), which can also affect the values of the coefficients.

Elements used in the United States information system of regulation of insurance activities IRIS (InsupanceRegulatoyInformationSystem) are an interconnected chain of indicators that characterize and disclose the main financial results of insurance organizations.

Despite the fact that the us insurance market is the largest in the world, with the advent of the economic crisis in the insurance industry appeared and a number of problems. Consider some of them.

During the crisis, many insurance companies were threatened with bankruptcy. Was no exception and the company is AIG. The US government has decided to allocate a loan to the insurance giant in the amount of 85 billion dollars, in return for which the state will be transferred 79.9% of the shares of the insurance company. This is expected to save the company from bankruptcy.[13]

In addition to the problems in insurance related to the financial crisis in early 2009, a scandal broke in connection with the payment of extremely generous bonuses to many employees of companies. In the context of the ongoing crisis, this fact has caused the indignation of the American public and politicians. According to initial reports, the company paid its employees $ 165 million in bonuses and bonuses. In response, the U.S. Congress passed a law requiring each recipient of these bonuses to be taxed at the rate of 90% of the bonus received.

Insurance companies are experiencing a huge collapse in the value of shares on the background of the financial crisis. They seek to compensate for the consequences of the financial crisis, in connection with which since January 2009, insurance rates have increased.

2. Types of us insurance

2.1 life Insurance

The us insurance market is the most developed insurance market in the world. Against the General background, personal insurance stands out, which has received sustainable development. It includes life insurance, annuity or pension insurance, and sickness and accident insurance.

Life insurance in the United States has existed since 1830.

Now life insurance is a strategically important industry that provides investment in the economy and the solution of social problems of society. Life insurance has long been more than just an inventory, thanks to which people can save money, make a profit on investments, provide pensions and medical services. it has become a specific industry, aimed at a variety of customer needs: buying a home, paying for the education of children, minimizing taxes and much more. It is typical for the United States that people often trust life insurance companies more than banks.[14]

An important area of activity for American insurance companies is life insurance (lifeinsurance). Life insurance, offering a wide range of insurance guarantees and investment services, allows a person to solve a range of socio-economic problems. Conventionally, these tasks can be combined into two groups: social and financial. The implementation of the first allows overcoming the insufficiency of the state social insurance and security system. The implementation of the second, on the one hand, contributes to an increase in personal income, and on the other – provides the necessary guarantees in the implementation of a number of financial and credit operations.

In the United States there are different types of personal insurance contracts:

* Ordinary life insurance provides for the payment of an insurance premium for the life of the insured person;

* Term-limited life insurance provides for the payment of the insurance premium for a certain period in installments or in the form of a lump sum payment of the entire required amount, after which the insurance policy is considered paid. The amount specified in the insurance contract shall be paid in a lump sum in case of death of the insured person;

 

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