insurance
For other uses of this term, see Security (disambiguation).
Insurance is a contract by which one person (the insurer) agrees, by charging a premium and if the event occurs whose risk is hedged to compensate within the agreed limits, the damage produced to the insured or meet capital, income or other agreed services. They define the first article of Law 50/1980, of 8 October, on Insurance Contracts (BOE no. 250, of October 17, 1980), which is valid in Spain. This contract involved an insurer or insurance company, which is who sells insurance and who covers the risk and the insured or policyholder, is the person buying the insurance policy and pay the premium. Sometimes it's not the same person, for one can be who has purchased the policy, which is the policyholder and be different who is guaranteed or insured, as for example in collective accident insurance recruited by enterprises on behalf of their workers.
The amount of money charged for a certain amount of insurance coverage or insured amount, is called the premium. The premium guarantees that the sum insured shall be remunerated in case of loss.
Risk management, which is the practice of assessing and controlling risk, has evolved as a discrete field of study and practice.
The transaction involves the insured loss is a relatively small and known in the payment of a premium to the insurer in exchange for the guarantee of the insurance company to compensate (indemnify) the insured in the event of a financial or commercial loss .
The insured receives a contract, called an insurance policy, detailing the conditions and circumstances under which the insured will be compensated economically.
From a mathematical point of view, insurance transforms the risks to which people are subjected likely bearable through a organization.1 Insurance is configured as a basic part of the current structure social.2 The insurance institution has two large demonstrations in society:
Social Security, which is a mandatory coverage, administered by the State aimed at providing protection and welfare of citizens, usually ensure a financial benefit for retirement, incapacity, death, unemployment etc.
Private insurance that cover and protect the people or entities that contract, which may be mandatory or voluntary subscription. Examples of private insurance is insurance of theft or fire in a building or car insurance or accident people.
History
The methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as early as the third and second millennium BC, respectively.
Chinese merchants traveling treacherous river rapids, distributing its products in several vessels and thereby limiting the loss due to the anxiety of some of them.
The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the guarantee of it to repay the loan if it was stolen or lost at sea.
Sometime in the first millennium BC, the inhabitants of Rhodes created the "general average". This allowed the groups of traders paying to ensure that their goods will be sent together. Premiums collected were used to reimburse any merchant whose goods were discarded during transport, either by storm or collapse.
Separate insurance contracts (ie, insurance policies not bundled with loans or other types of contracts) were invented in Genoa in the 14th century, as insurance pools backed by guarantors with properties. The first Genoa insurance contracts dating from 1347, and in the following century marine insurance is widely developed and premiums were intuitively varied according to risk. These new insurance contracts allowed insurance to secede from investments, which was found to be useful for the first time in marine insurance.
macroeconomics
From a macroeconomic point of view, the insurance institution provides two major contributions:
Stimulating investment. According to Kenneth Arrow, the displacement of the risk insurance is very beneficial from a social point of view as it induces the undertaking of new economic activities and can be stated that in the absence of insurance business, the volume of investment would be reduced and ultimately decrease income and welfare.
It helps prevent inequalities. Insurance impoverishment that avoids extremes are caused by accidents or deaths, contributing to greater economic equity.
The insurance contract
The insurance contract is one for which the insurer undertakes, by charging a premium and if the event occurs whose risk is hedged to compensate within the agreed limits, the damage to insured or meet capital, income or other agreed services.
The contractor or policyholder, you may agree or disagree with the insured, for its part, undertakes to make payment of the premium, in exchange for the cover granted by the insurer, which prevents him face greater economic damage, if the loss occurs.
Insurance sector
Insurance companies are financial intermediaries from economically and financially. This sector differs from other economic sectors in that, to start business needs a relatively small fixed capital, since it does not require large investments in assets for their activity and working capital would anticipate their own customers on account of product which is to begin manufacturing at that time (security), and has billed in advance. So, theoretically, their needs financing techniques are very small. Moreover, the product they sell, safety is ensured to all customers, even if delivery is made to only a part of the clientele. Weather also plays in favor of the insurer, and the corresponding cost (the accident) is distributed postponed and leading meanwhile a wealth of savings that form the so-called technical provisions; Therefore, from a financial point of view, the holder of an insurance policy is a lender that provides credit insurer to produce the product (safety), thus becoming the insurer a mere investor funds not consumidos.2
The insurance business, by its very nature, makes long-term investment which, in general, was not even considered by the contracting savings insurance. However, these savings from the financial point of view is very stable and long term.
In the European Union as well as in most countries, private insurers are subject to control and supervision by the administrative authorities and to operate need to obtain a special authorization LINDE Paniagua, has called Authorization forming E. and subjected to constant monitoring of their activity. This is because insurance is a contract in which the policyholder pays the premium in advance, while the insurer will indemnify post when the incident occurs and therefore is in the public interest then the insurer has the financial capacity to do so . All this is done under administrative law provisions that dictate authorities. Enrique Linde Paniagua, Professor of Administrative Law at the National University of Distance Education (UNED) has studied this aspect of Administrative Law of private insurance in his works "PUBLIC INSURANCE LAW" (1977, editorial Montecorvo) and "special part of ADMINISTRATIVE LAW. THE INTERVENTION OF THE ADMINISTRATION IN SOCIETY "(2012, editorial Colex) among many others, being very new at the time that the intention is the existence of a public or private insurance Administration. Today however is an idea accepted by the whole doctrine, some of which even has specialized in the study of this part of administrative law such as JESUS LOPEZ-BREA LOPEZ RHODES, teacher also of the University, who has deepened in the study of this phenomenon in his works "STUDY AND CLASSIFICATION OF PRIVATE INSURANCE FROM THE PERSPECTIVE OF ADMINISTRATIVE LAW" (publisher Tirant Lo Blanch 2013) proposing private insurance are divided into three main types: I) Forced insurance (like compulsory travel insurance), II) compulsory insurance (as insurance certificate) and III) voluntary insurance (such as life insurance) and "European Insurance and Occupational Pensions Authority (EIOPA) "(2015 Dykinson publisher). In Spain the control of private insurers leads the Ministry of Finance and Competitiveness through the Direccion General de Seguros (DGSFP), an organization based in Paseo de la Castellana, 44 (28046) Madrid and website http : //www.dgsfp.mineco.es/direcciongeneral/contacto.asp while in the European Union oversight is the European Insurance and Occupational Pensions -EIOPA- (European Insurance and Occupational Pensions Authority) based in Westhafenplatz 1 (60327) Frankfort (Germany) and whose website is: https://eiopa.europa.eu/
The art. 149.11 of the Spanish Constitution grants competition in the basic law of the State Insurance and the Law 20/2015, of July 14, management, supervision and solvency of insurers and reinsurers (BOE no. 168 of 15 July 2015) is the provision which governs the way it should be done as of January 1, 2016 that private insurers control by the Administration. At the level of the European Union that supervision is regulated by Directive 2009/138 / EC of the European Parliament and of the Council of 25 November 2009 on access to the business of insurance and Reinsurance (Solvency II) (OJ no. L335 of 17 December 2009).
