In a coinsurance agreement, the liability is to the policyholder. Co-insurance and reinsurance agreements
Coinsurance is one of the types of insurance regulated by insurance legislation. In Art. 953 of the Civil Code of the Russian Federation provides that the insurance object can be insured under one insurance contract jointly by several insurers (co-insurance). If such an agreement does not define the rights and obligations of each of the insurers, they are jointly and severally liable to the insured (beneficiary) for the payment of insurance compensation under a property insurance agreement or the insured amount under a personal insurance agreement. In Art. 12 of the Insurance Law, co-insurance, as in the Civil Code, is defined as insurance of the same insurance object by several insurers under one insurance contract. In principle, this definition of coinsurance completely coincides with Art. 953 of the Civil Code of the Russian Federation.
Coinsurance refers to those types of insurance under the terms of which the insurance risk is subject to transfer or redistribution between several insurers. In other words, co-insurance is a type of obligation under the terms of which one creditor - the policyholder - transfers his risk to several debtors - insurers (meaning several insurance organizations) for insurance. An obligation with a plurality of persons on the side of the creditor or debtor is permitted by law and is expressly provided for in Art. 308 of the Civil Code of the Russian Federation, which regulates the procedure for fulfilling an obligation in which many persons participate.
In relation to the type of insurance obligation under consideration, co-insurance, in which several debtors participate (Article 321 of the Civil Code of the Russian Federation), gives the creditor (insured) the right to demand performance from each debtor (co-insurer), and each debtor (co-insurer), in turn, is obliged to fulfill the obligation equally with another, unless otherwise provided by law or agreement.
With regard to the fulfillment of obligations by joint and several debtors under co-insurance agreements, the legislator granted co-insurers the discretionary right to agree on conditions regarding the amount of liability of each co-insurer.
So, in particular, M.Ya. Shiminova notes that with a shared obligation, each of several debtors is responsible only for himself, only in his share, and each of several creditors has the right to demand performance only in a certain share belonging to him. In an obligation with a joint and several obligation, the creditor is given the right to choose to demand the proper fulfillment of this obligation both from all co-debtors jointly, and from any of them separately, both in full and in part of the debt *(90).
The right to choose the type of liability - joint or shared - is the subject of an agreement between co-insurers, who, as practice shows, in the vast majority of cases agree on shared liability. They are encouraged to do this by the economic component of the insurance transaction, namely the cost of the risk accepted for insurance (meaning the share of the insurance premium and, accordingly, the amount of liability).
The fact is that policyholders, as a rule, transfer large risks to co-insurance - risks with a significant insured amount, which, due to its size, in the event of an insured event, can negatively affect the financial position of the insurer and upset the positive balance of its insurance portfolio. And the insurers themselves try not to assume individual liability for major risks. Therefore, both policyholders and insurers when insuring large risks are quite satisfied with the design of shared co-insurance, according to which the total liability of co-insurers is strictly divided into specific and defined shares.
Obviously, these circumstances were also taken into account by the legislator when granting co-insurers a discretionary right related to the choice of the type of liability in co-insurance agreements.
Yu.B. Fogelson believes that under co-insurance agreements, responsibilities between co-insurers can be redistributed not only regarding the payment of insurance compensation, but also according to the types of insured interests, if the insurance contract provides for the insurance of several objects at the same time. For example, in his opinion, it can be provided that one insurer is obliged to pay compensation when losses occur in the insured property, and another - when liability for causing harm to third parties occurs *(91). In principle, this opinion deserves attention from a theoretical point of view and is interesting for insurance law in general. But from a practical point of view, it is debatable, since the legislator in Art. 953 of the Civil Code of the Russian Federation, regulating the procedure for transferring insurance risk to co-insurance, means only one object of insurance - in the singular and, accordingly, only one insurable interest. This follows from the direct interpretation of the law. Moreover, this provision is also provided for in Art. 12 of the Law on Insurance, which indicates that the same insurance object is transferred to co-insurance, and not several.
This regulation by the legislator is quite reasonable, since for coinsurance it is essential to share the risk of insurance payment, and not to separate the objects of insurance. This directly follows from the rule of law, which deals only with the shared responsibility of co-insurers for the payment of insurance compensation.
If you follow the concept of Yu.B. Fogelson about the possibility of transferring two or more insurance objects for co-insurance, then for insurers in this case the economic meaning of co-insurance is lost. It is easier for insurers to divide the objects of insurance by entering into independent obligations under separate insurance contracts than obligations to pay insurance compensation, or within the framework of one co-insurance contract to divide the responsibility for insurance compensation among themselves. In other words, if we are talking about the division of insurance objects, it is advisable for each insurer to conclude an independent contract for one insurance object.
Consequently, in the first case we are talking about sharing insurance risks, which is called combined insurance, and in the second case, we are talking about sharing responsibility for insurance payment (indemnity or security), which is called co-insurance. By and large, for insurers from an economic rather than a legal point of view, these are homogeneous types of insurance using different methods of legal registration and legal construction.
Therefore, apply the concept of Yu.B. Fogelson is advisable in combined insurance (Article 952 of the Civil Code of the Russian Federation), given that it allows simultaneous insurance of different insurance risks, both under one contract and under separate insurance contracts, including under contracts with different insurers. Consequently, if different risks are transferred to several insurers, they must be formalized in one or more contracts.
The procedure and conditions for concluding insurance contracts against various risks or combined insurance contracts are defined in Art. 952 of the Civil Code of the Russian Federation.
In combined insurance there are several mandatory rules that require strict compliance. One of them is the rule provided for in paragraph 2 of Art. 952 of the Civil Code of the Russian Federation, which determines that if out of two or more agreements concluded in accordance with paragraph 1 of Art. 952 of the Civil Code of the Russian Federation, insurers have an obligation to pay insurance compensation upon the occurrence of the same insured event; the rules provided for in paragraph 4 of Art. 951 of the Civil Code of the Russian Federation. This provision of the law determines the consequences of insurance in excess of the insurance value in case of double insurance, providing for a reduction in the amount of insurance compensation by each of the insurers under double insurance in proportion to the reduction in the initial insurance amount under the corresponding insurance contract.
In addition to combined insurance, co-insurance has some external similarities with reinsurance, especially with regard to the issue of redistributing risk over the insurance object between several insurers. The difference is that, in accordance with the terms of co-insurance, when an insured event occurs, all co-insurers immediately become responsible for the insurance payment, each with their share of responsibility. Moreover, in co-insurance, the policyholder has the right to make a claim for payment of insurance compensation to any of the co-insurers, in proportion to its share of liability under the co-insurance agreement.
In reinsurance, the responsible person to the policyholder for the payment of insurance compensation upon the occurrence of an insured event is only the direct insurance insurer, since other insurers-reinsurers do not have any obligatory relations with the policyholder. Accordingly, reinsurers are not joint and several debtors to the policyholder under reinsurance contracts, which deprives the latter of the right to make a claim for payment to any of the reinsurers individually. This is explained by the fact that reinsurers are liable only to the reinsured - the insurer under a direct insurance contract to the extent of their share of liability.
In co-insurance agreements, as a rule, insurers appoint a leader - a co-insurer, who actually ensures the fulfillment of all technical conditions of the co-insurance agreement (this means ensuring the exchange of documents between the parties to the transaction, providing documents, conducting an inspection of the site of the insured event, calculating damage, appointing a surveyor, etc.). p.).
It is very important that insurers - participants in the co-insurance agreement have licenses to carry out those types of insurance that are the content of the co-insurance agreement. The lack of a license for a co-insurer to carry out a particular type of insurance entails consequences associated with the recognition of part of the co-insurance agreement as invalid (in terms of the share of the co-insurer who does not have a license).
Coinsurance(eng. coinsurance) – joint insurance by several insurers of the same object. This method of providing insurance protection is used, as a rule, when insuring large objects, when one insurance company is not able to take on large risks.
Coinsurance method is used relatively rarely and refers mainly to friendly companies, companies within insurance concerns or as a friendly act towards a partner.
Coinsurance is not a form of reinsurance however, along with reinsurance, it is a form of redistribution of insurance risks.
With coinsurance The policyholder may be issued joint or separate insurance policies based on the shares of risk accepted by each insurer. Each insurer's share of liability is determined in proportion to the premium it receives. In practice, it is customary for the co-insurer with a smaller share to follow the terms of insurance approved by the insurer with the largest share. When jointly insuring an object, insurance companies sign one insurance contract, which, along with the insurance conditions, contains conditions defining the rights and obligations of each insurer to insure this object.
One form of coinsurance is insurance pools, which have become widespread recently. Under this type of co-insurance, participants (members) of the pool bear joint liability for the risks taken for insurance. To manage the pool (risks that are the responsibility of the insurance pool), its participants create a temporary (for the period of validity of the contract) bureau, which acts as a representative of the pool. This bureau is not, as a rule, a legal entity. Also, the affairs of the pool can be managed by a specially engaged management company (often insurance brokers act in this capacity).
Thus, coinsurance is one form of providing sustainable insurance protection that uses the principle of cooperation between insurers.
It is important to distinguish coinsurance from double insurance, which is often a sign and manifestation of the insured’s bad faith. In case of double insurance, the total liability of the insurers exceeds the insured value and if an insured event occurs, the policyholder - if all insurers pay him the amount under the contract in full - will experience unjust enrichment.
In the coinsurance agreement must contain conditions defining the rights and obligations of the insured to the insurers (including with regard to the payment of insurance premiums to them), as well as the insurers (all together and each individually) before the insured (including with regard to the insurance payment).
As a result, coinsurance is characterized by the following:
a) the policyholder is one person;
b) insurance is carried out in relation to one object;
c) under one agreement;
d) jointly by several insurers;
e) for the same insurance risk.
Article 953 of the Civil Code provides that if the co-insurance agreement does not define the rights and obligations of each of the insurers, they are jointly and severally liable to the insured (beneficiary) for the insurance payment.
Therefore, as a general rule, the Civil Code provides joint liability of insurers to the policyholder for insurance payment. This means that if the policyholder has the right to an insurance payment, he can demand it both from all insurers jointly and from any of them separately, both in full and in part of this payment.
In practice, it is accepted that the terms of the coinsurance agreement are formed by the insurer that bears the largest share of obligations to the policyholder. Such an insurer is usually called leading.
If there is an appropriate agreement between the co-insurers, one of them can represent all co-insurers in relations with the insured, remaining liable to him only in his share. Such an insurer must have a duly executed power of attorney from other co-insurers. Note that the identification of a leading (main) insurer does not transform the co-insurance agreement into an obligation with the participation of only one insurer or into a type of reinsurance.
Co-insurance is a contract in which the insurance object is insured jointly by several insurers. Previously, Art. 12 of the Law and Art. 953 of the Civil Code defined the content of the co-insurance agreement in different ways. The law required that the co-insurance agreement clearly delineate the rights and obligations of each insurer. In practice, this provision created certain difficulties for the policyholder when receiving the insurance amount (the need to contact each insurer for payment of its share, etc.). In addition, if the obligations of the insurers are not determined with sufficient accuracy, the co-insurance agreement may generally be declared invalid. Obviously, that's why Art. 953 of the Civil Code establishes a different rule: if the co-insurance agreement does not define the rights and obligations of each insurer, then the law imposes on them the obligation to bear joint liability for the obligation. In the modern version of the law, these discrepancies between the law and the Civil Code have been eliminated.
By its legal nature, a co-insurance agreement is a typical agreement with a plurality of persons in an obligation. The need for co-insurance may arise for both the policyholder, when insuring large property risks, and the insurer, when there are insufficient insurance reserves. In these cases, it provides significant advantages when accepting large risks for insurance. However, this method is not convenient for insuring medium and small risks due to the high costs of servicing such contracts. In this regard, competition between insurance companies is also of no small importance. In addition, even when insuring large risks, the policyholder experiences inconvenience due to the need to contact several insurers at once, and for some insurers, participation in a co-insurance agreement may reveal their inability to independently insure large risks, which affects their business reputation.
Therefore, reinsurance is a more convenient way to reduce the insurer's risk.
The legal regulation of reinsurance is based on Article 13 of the Law and Art. 967 Civil Code. Reinsurance is insurance by one insured (reinsurer) under the terms of the risk of fulfillment of all or part of its obligations to the insured by another insurer (reinsurer), determined by the contract. Reinsurance is “secondary” insurance, the essence of which is that the insurer itself insures certain risks from another insurer. Reinsurance is dependent and derivative of insurance, therefore the rules provided for business risk insurance apply to it, unless otherwise provided by the reinsurance agreement. In this case, the reinsured remains liable under the main insurance contract to the policyholder in full. Consecutive conclusion of two or more reinsurance contracts is allowed.
Taking into account the real circumstances of insurance (competitive struggle between the many new policyholders who have appeared on the insurance market, the small size of their own insurance funds, etc.), it must be recognized that reinsurance is an almost ideal way to compensate for losses through the redistribution of insurance funds. An insurance company, by transferring to one or several insurers that part of the risk that exceeds its financial capabilities, achieves balance in its insurance portfolio. This means that the insurance company can conclude the maximum possible number of insurance contracts with an acceptable liability for each insurance risk.
From the point of view of the policyholder, reinsurance provides additional guarantees of the reliability of compensation for damage in the event of an insured event, thereby ensuring good service, and this affects the decision to renew the insurance contract and the conclusion of contracts for other types of insurance.
Since reinsurance is a unique form of insurance, it is guided by the same principles: the presence of insurable interest, compensation for losses, the highest integrity. As in insurance, where the specific interest of the policyholder is insured, only the actually existing interest of the insurer can be reinsured. The insurer, taking on the risk, also assumes a certain liability, which means it has a certain insurable interest, which is subject to reinsurance. Otherwise, the reinsurer will assign non-existent or exaggerated risks to the reinsurer. Only the guarantees established in the main contract can be shared by the reinsurer with the reinsurer.
At the same time, the legal regulation of reinsurance has its own characteristics and history. The Law “On Insurance” directly imposed on the insurer the obligation to reinsure obligations in volumes exceeding the ability to fulfill them at the expense of its own funds and insurance reserves (Article 27, paragraph 2). In the original version of the Law “On the Organization of Insurance Business in the Russian Federation” (Article 13) and Chapter 48 of the Civil Code (Article 967, Part 1), this norm has undergone changes and is of a dispositive nature. Now the insurer can insure the risk of payment of insurance compensation or the insured amount assumed under the insurance agreement with the reinsurer in whole or in part under the agreement concluded with him. If we take into account that the Civil Code is a long-term normative act, then this provision is quite acceptable. However, at the present time, when existing economic relations are still far from those for which the Civil Code is designed, this norm does not contribute to increasing the guarantees of reliability of many insurance companies, especially those with a small insurance fund, for the policyholder. The current version of the Law prohibits reinsurance of life insurance contracts in terms of survival to a certain age or the occurrence of another event. Insurers engaged in life insurance are prohibited from reinsuring property risks. All these measures are aimed at increasing the reliability and guarantees of the policyholder or insured person in life insurance.
A feature of the legal regulation of reinsurance contracts is that in case of reinsurance, the original insurer is responsible for paying the insurance compensation or the insured amount to the policyholder under the main contract. It follows that the policyholder does not have the right to claim the insurance payment directly against the reinsurer. The law's allowance for the sequential conclusion of two or more reinsurance agreements means that the reinsurer can also reinsure its risks with another reinsurer. In insurance practice, a special designation has developed for the list of risks accepted for insurance and subject to reinsurance - bordereau (statement, register, inventory).
Due to the fact that there are actually two insurers involved in insuring the initial risk, the original insurer and the reinsurer, the question naturally arises about the extent of responsibility of each of them in the event of an insured event. In this regard, it should be noted that there are three types of transfer of insurance risks during reinsurance: facultative, obligatory and facultative-obligatory.
With facultative reinsurance, only certain risks with the most complete information about them are transferred to the reinsurer. In this case, mutual obligations of the parties arise only after the conclusion of a reinsurance agreement for any specific risk. Each insurance risk is transferred separately, under a separate contract, and the parties are free to express their will.
In obligatory reinsurance, the insurer transfers to the reinsurer without fail, on the basis of an agreement, all or a certain part of the risks in excess of a certain amount, and the reinsurer must accept this part of the risk for reinsurance. Especially often, such reinsurance is used by parent companies in relation to subsidiaries, and a certain limit of liability is established for the subsidiary.
Currently, mixed, optional obligatory contracts are widely used. When an insured event occurs, the reinsurer bears responsibility under the conditions specified in the contract, and the choice of risks that are transferred to reinsurance remains with the insurer.
In insurance practice, two forms of participation of the reinsurer in the activities of the insurer have developed: proportional and disproportionate.
The proportional system includes three main types of reinsurance contracts: quota reinsurance contracts, excess contracts and quota-excess contracts.
Under quota contracts, the cedant undertakes to transfer to the reinsurer, and the reinsurer undertakes to accept a share in risks of a certain type in a specific fixed amount - a quota. The share of insurance payments will be redistributed accordingly. For example: the insurer determines the share of its own retention in the amount of 40% and transfers 60% of the risk to the insurer. In this case, upon the occurrence of an insured event, the insurer bears the cost of paying 40% of the insured amount or compensation and 60% of these payments fall to the share of the reinsurer.
The excess contract determines the level of the insurer's own retention and the reinsurer participates in the insurance payment only when this threshold is exceeded. For example: the level of the insurer's own retention is determined in the amount of 500 thousand rubles, and the reinsurer participates in insurance payments exceeding this amount.
Mixed, quota and excess contracts are used less often and are a combination of quota and excess reinsurance. An excess can be set depending on a certain share (quota) of one’s own retention; above the retention level, an excess is applied, which is fixed in absolute terms.
The disproportionate system includes two types of contracts: an excess of loss contract and an excess of loss contract.
In an excess of loss agreement, the reinsurer provides coverage for that part of the loss that exceeds the established amount of the reinsurer's own participation (deductible), but below the amount of the reinsurer's maximum liability (reinsurance coverage limit).
The excess of loss agreement provides that loss up to a certain limit will be covered exclusively by the reinsurer itself, and all excess of the loss limit will be covered by the reinsurer.
Reinsurance is a fairly profitable business, so the original insurer has the right to a portion of the reinsurer's profit specified in the contract - a bonus. It is beneficial for the reinsurer to use the bonus in order to attract as many insurers as possible and increase the level of participation of each of them in reinsurance.
There are certain conditions that are most often included in reinsurance contracts as essential terms of the contract:
subject and general provisions of the contract;
territorial clause (location of the risk being reinsured);
precise determination of the beginning and end of the reinsurer’s liability;
clause on exclusions from coverage (force majeure);
conditions of reinsurer liability;
clause on original conditions (the reinsurer is subject to the conditions specified in the insurance policy);
a condition for the reinsurer to follow the fate of the reinsurer;
border (list of risks, terms and reporting procedure for the reinsurer);
Errors and Omissions Disclaimer;
commission and bonus;
the right of the insurer to independently regulate losses;
offset clauses in mutual settlements;
procedure for termination of the contract and arbitration.
The parties, at their discretion, may include in the reinsurance agreement other conditions that they consider significant.
quota reinsurance contract extraordinary
Not every insurance company can accept a very large risk due to limited financial capabilities. In addition, there are many particularly large risks that no insurer can take entirely upon itself. In order to insure such risks, while maintaining a balanced insurance portfolio, reliability and financial stability, most insurance organizations need to transfer a certain part of accepted insurance obligations to other insurers.
In insurance practice, two methods are known for redistributing the insurer's obligations to policyholders.
1. Coinsurance- insurance of the same object by several insurers under one insurance contract.
If the co-insurance agreement does not define the rights and obligations of each of the insurers, then they are jointly and severally liable to the insured (beneficiary) for payment of insurance compensation under a property insurance agreement or the insured amount under a personal insurance agreement.
In practice, it is accepted that the insurer participating in coinsurance in a smaller share follows the insurance conditions accepted by the insurer having the largest share.
Example 22. The shopping center building is insured for 65 million rubles. under one contract by three insurers: the first for 26 million rubles, the second for 24 million rubles, the third for 15 million rubles.
As a result of an insured event (fire), the damage amounted to 18 million rubles.
Determine the amount of insurance compensation to be paid to the policyholder by each insurer.
Solution.
1. The amount of insurance compensation to be paid: a) by the first insurer
b) the second insurer
c) a third insurer
il=1& ^= 18 0.23= 4.14 million rubles.
- 2. Total amount of insurance compensation
u/ = ^I^= 7.-6 6.66 4.M 18 million rub.
2. Reinsurance- activities aimed at protecting by one insurer (reinsurer) the property interests of another insurer (reinsurer) related to the insurance payment obligation accepted by the latter under the insurance agreement (main agreement).
The origin of reinsurance in world insurance practice began back in the 14th century. The first reinsurance contract was concluded in 1370 between three merchants (one of whom would act as an insurer, and the other two were reinsurers) to cover the risk associated with the transportation of goods by sea from Genoa to Bruges2. Subsequently, with the emergence of new major risks, insurers increasingly needed reinsurance coverage.
Currently, given the colossal cost of many insured objects, the stable functioning of insurance companies without reinsurance is impossible.
Reinsurance allows the insurer:
- - limit risk;
- - accept large risks for insurance without danger to yourself;
- - expand the list of risks accepted for insurance, to cover a larger number of types of insurance;
- - protect your assets from unexpected unfavorable results under one of the types of insurance;
- - increase the balance and stability of your insurance portfolio;
- - ensure financial stability and normal operations, regardless of the size of equity capital and insurance reserves.
Participants in the reinsurance process are:
- 1) insurance companies engaged only in insurance. They transfer risks to reinsurance;
- 2) insurance companies engaged in both insurance and reinsurance. They both transfer and accept risks to reinsurance;
- 3) reinsurance companies, which are both sellers and buyers of reinsurance. Consequently, the risks accepted by them for reinsurance can be transferred for reinsurance to another reinsurer.
Reinsurance company (reinsurer) - a legal entity that carries out activities to protect the property interests of the insurer related to the insurance payment obligation assumed by it under the insurance contract.
The stages and roles of participants in the reinsurance process are presented in Fig. 9.1.
Rice. 9. 1
Insurer No. 1, who transfers the risk (or part of the risk) accepted by him for insurance to reinsurance, is called reinsurer, or assignor.
The process of transferring risk to reinsurance is called cession those. the risk is transferred.
Insurer No. 2, accepting the risk from the assignor, is called reinsurer No. 1, or assignee. In case of transfer to further reinsurance of the risk reinsured by him, as the second transferring risk, he will be retrocedent.
The process of transferring risks accepted for reinsurance to further reinsurance is called retrocession.
Insurer No. 3, accepting the risk from the retrocedent, is reinsurer No. 2 and is called retrocessionist.
When risk reinsurance responsibility before the policyholder for payment of insurance compensation or sum insured is borne by the insurer who accepted the risk from the insured. He makes an insurance payment upon the occurrence of an insured event, and then the reinsurers transfer to him the amounts due from them in accordance with the volume of obligations they have assumed under the reinsurance agreement. Between the policyholder and reinsurers no legal relationship arises.
There are active and passive reinsurance.
Active reinsurance - accepting risks for coverage, i.e. sale of insurance guarantees.
Passive reinsurance - transfer of risks to reinsurers, i.e. purchase of insurance guarantees.
There are three ways to transfer risks to reinsurance.
- 1. Direct transfer of risks to reinsurance from the reinsurer to the reinsurer.
- 2. Transfer of risks to reinsurance through an intermediary - an insurance broker.
- 3. Transfer of risks to the reinsurance pool.
Reinsurance pool - a voluntary association of insurance companies that transfer to the pool risks subject to reinsurance in excess of the amount of their own retention. Pool participants, in accordance with the agreement they have concluded, are obliged to take a share in all risks transferred to the pool.
Article 953 of the Civil Code of the Russian Federation, with minor variations, gives approximately the same definition: “co-insurance - insurance of one object under one insurance contract jointly by several insurers.” In this case, the insurance object can be insured under one insurance contract jointly by several insurers. If such an agreement does not define the rights and obligations of each of the insurers, they are jointly and severally liable to the insured (beneficiary) for the payment of insurance compensation under a property insurance agreement or the insured amount under a personal insurance agreement.
The economic dictionary gives the following definition: Co-insurance is a method of leveling and distributing large risks between insurers, in which each of them enters into a separate contract with the policyholder; Some of the risk may be left to the policyholder.
The insurance business was created to reduce the risks of economic activity, but it itself is a very risky type of business. Therefore, there is a need to insure the policyholder himself. For this purpose, the primary insurance system is complemented by coinsurance and reinsurance systems.
As a result, coinsurance is characterized by the following:
a) the policyholder is one person;
b) insurance is carried out in relation to one object;
c) under one agreement;
d) jointly by several insurers;
e) for the same insurance risk;
e) in the same period.
Coinsurance is an institution designed to raise the level of insurance protection of the interests of the policyholder. What one insurer cannot do alone, they can do together. Equally, coinsurance contributes to the development of business ties between insurers, deepening and expanding production cooperation between them, which contributes to the development of the insurance services market. In this case, responsibility for the insurance risk is divided between several insurers by assigning to each of them a pre-agreed share of possible losses.
A coinsurance agreement differs from double insurance in that in the latter case there will be as many insurance contracts as there will be insurers, i.e. the policyholder enters into an independent contract with each of them. With coinsurance, there is only one insurance contract. This, however, does not exclude the possibility that even with co-insurance, each of the insurers issues a personal insurance policy to the policyholder for its share of obligations, but in legal terms there will still be one contract. By the way, an insurance policy with coinsurance can also be joint.
For joint insurance of large or especially large risks, insurers can create, on the basis of an agreement on joint activities, simple partnerships, which in insurance practice are called insurance pools. Within these pools, insurers can coordinate their activities to implement co-insurance agreements, distribute risks in the process of concluding them, specify general contractual obligations, and carry out other cooperation in the implementation of their obligations, including mutual ones. [hood]
The co-insurance agreement must contain conditions defining the rights and obligations of the policyholder to the insurers (including with regard to payment of the insurance premium), as well as the insurers (all together and each individually) to the policyholder (including with regard to the insurance payment).
Each participant in such a contract is liable to the policyholder only for his part of the insured risk. At the same time, for the policyholder, the conditions and tariffs are set uniformly in all insurance companies.
As a general rule, the Civil Code provides for joint and several liability of insurers to the policyholder for insurance payments. This means that if the policyholder has the right to an insurance payment, he can demand it both from all insurers jointly and from any of them separately, both in full and in part of this payment.
At the same time, the insurance contract may also provide for the insurers' shared liability to the policyholder. For example, the owner of a residential building insured his building against fire under one insurance contract simultaneously with three insurers. It is stipulated that the obligation of the first insurer is 50% of the cost of the structure, the second - 30%, and the third - 20%. Please note that payment of insurance compensation (sum insured) by one of the insurers does not automatically generate payment obligations for other insurers. Each of them has the right to challenge the legality of their own payment.
Co-insurance can take place both on the initiative of the policyholder, who, being unsure of the reliability of the insurance protection offered to him by one insurer, requires additional insurers to be involved in this matter, and on the initiative of insurers, each of whom individually doubts their own capabilities.
D. Bland provides a comparison of coinsurance and reinsurance (Figure 75). In the diagram, in each case the leader
Figure 75. Differences between coinsurance and reinsurance.
or the first insurer retains 40% of the risk - the difference arises only in the relations of the parties between themselves. In practice, it is accepted that the terms of the coinsurance agreement are formed by the insurer that bears the largest share of obligations to the policyholder. Such an insurer is usually called a leading insurer. Insurers that participate in coinsurance in a smaller share follow the terms of the contract (and, accordingly, the rules of insurance) adopted by the insurer whose share is the largest (i.e., they follow the leading insurer).
Largest share of responsibility
of the co-insurers determines his right to establish the basic conditions of the joint contract. For example, the liability of the first insurer is 38%, the liability of the next two insurers is set in equal shares 1:1. This means that when concluding a co-insurance agreement with three insurers in the amount of 1869 thousand rubles. the liability of the first insurer is determined in the amount of 710.22 thousand rubles. (1869 x 38\100). Subsequent insurers bear equal responsibility, and each of them is liable for insurance risks in the amount of 579.39 thousand rubles (1869 - 710.22 / 2), which is 31% of the total liability.
Consequently, priority in developing the terms of the contract, determining various clauses and additions belongs to the first insurer with a 38% share of responsibility. Upon the occurrence of an insured event, insurance payments are paid to the policyholder by insurers in the following proportion: 38% - 31% - 31% (an example is given according to).
Article 13. Reinsurance
(as amended by Federal Law dated December 10, 2003 N 172-FZ
Reinsurance is the activity of protecting by one insurer (reinsurer) the property interests of another insurer (reinsurer) associated with the latter's obligations for insurance payments assumed under an insurance agreement (main agreement).