Insurance of financial risks: types, rules, conditions

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Very often a person in the course of commercial activities or when trying to increase his funds gets the opposite effect. Business is closely related to risk. They are external and internal, and can arise at any stage of activity.

Financial risk insurance: types, rules, conditions

The development of financial markets has affected all countries of the world. This led to the acceleration of globalization and liberalization processes, which directly affected all participants in the global financial industry. Every businessman in one way or another feels the influence of these factors, so he is forced to take steps to protect his finances from unfavorable situations.

Insurance of financial risks in this context has become a necessary measure for each participant in financial markets, as there are now significantly more risk factors. This is due to the implementation of new financial instruments, systems and methods. Implementation of innovations is ideally designed to reduce risks, but this creates problems of a different nature.

This picture emphasizes the role of risk-managers, as well as their ability to respond in a timely manner to what is happening and make adequate decisions. The only true thing in this case is the use of insurance and hedging instruments aimed at saving funds. Almost the entire future of the corporation depends on the correct choice.

Financial insurance in Russia

The same trend is typical for Russia. Recent transformations in the world of finance have forced representatives of the business world to completely reconsider their views on doing business. Insurance of financial risks, along with the need to develop the entire industry, has become the most important task of the state. The continuity of economic cycles depends on how successfully this task is solved.

Nevertheless, the system of state influence on the private insurance sector is still not formed. This picture is a direct consequence of internal factors associated with economic reforms in the country. It is also worth mentioning the lack of a theoretical basis for insurance across the country. The classification of financial risks specifically for the Russian segment and its features has not been made.

Features

Financial risk insurance is a measure taken in case of loss of assets of an enterprise or an investor. The key word is "cases of loss". These factors can be of a different nature: funds can be unsuccessfully invested, lose positions in the securities market, or simply stolen.

In general, the most risky areas in the world of finance are consideredfinancial-credit and exchange industries. But the first option allows for a reservation: consumer or similar small loans can be considered a risk in the field of lending, where the insured is an individual - the guarantor. There is no such instrument on the exchange market.

Types of risks

These include:

• Fake securities.
• Fake of payment documents: payment orders, cashier's checks or warrants.
• Loss of securities.
• Counterfeit turnover factor.
• Counterfeit banknotes getting into bank circulation.
• Participation of bank employees in fraudulent schemes.
• Theft, damage or destruction of property and money stored in a bank.
• The same applies to accounting documents, software and access to the bank's servers.

The above types of risks are called financial, but they can also be classified as property. Regardless of their name, the financial market offers the appropriate types of financial risk insurance. Consider them in detail.

Types of insurance

Taking into account the extreme relevance of preserving the finances and property of subjects of law, the following types of insurance are offered:

1. Exchange risks. The exchange market may be primarily affected by such factors as the inability to pay for transactions, the failure of the brokerage firm to receive commission payments from transactions, unsuccessful transactions with securities.
2. Indirect risksbecome relevant when situations such as loss of income due to reasons beyond the control of the company, unforeseen additional expenses, loss of temporary and additional profit occur.
3. Credit insurance is practiced on deposits (insured by the bank or depositor), commercial loans or bills of exchange. Late repayment of credit obligations is insured by the bank.
4. Insurance against unauthorized actions of state supervisory and regulatory authorities. In this case, the process is considered from the point of view of various provisions of the Civil Code of the Russian Federation and represents a whole range of measures. Insurance can be directed to partial or full compensation for damage. An insured event in this context is considered to be a stoppage of production processes at the enterprise. It may be complete or partial. In the final result, the fact of the damage caused is considered. In addition, the shutdown of the enterprise's activities creates risks for employees and a number of contractors, manifested in job loss, litigation and related costs, violation of the terms of contracts with partners and other negative consequences.

History and reality

The rules for financial risk insurance in the Russian Federation are subject to Federal Law 4015-1, in force since 1992. According to this document, insurance is a procedure for indemnification with certain conditions. The object of insurance is financial resources, and the instrumentprotection is an insurance fund, which is formed from the monthly contributions of property owners. When it comes to insurance of legal entities, the procedure applies not only to economic factors, but also to force majeure circumstances of a different origin.

As for the financial insurance of ordinary citizens (relative to the new service for Russia), here an insured event can be considered lost profits, unforeseen losses or litigation involving financial costs.

In a similar manner, the risks of equity holders are insured. The relevance of this service is associated with a large number of deceived equity holders who have become victims of unscrupulous construction companies. However, this is not the only risk factor. Also, an insured event can be considered a sharp change in market conditions, price changes or default. In all cases, the guarantor of compensation for damage is a financial risk insurance agreement concluded between the client and the insured.

Contract conditions

Conditions of insurance in the Russian Federation are regulated by the Civil Code of the Russian Federation. The procedure consists of several specific steps. A financial risk insurance contract must be drawn up in writing, but it can also be done orally. Such a solution to the issue also has legal force, but certain conditions must be met, which will be discussed below.

If this type of relationship refers to compulsory types of state insurance, then a citizen is issued onlyan insurance policy based on his verbal request. Such a policy will have full legal force and is used to obtain damages. This possibility is provided for by Article 930 of the Civil Code of the Russian Federation.

Written contract

Article 940 of the Civil Code of the Russian Federation states that in some cases a written contract should be concluded with the client, regardless of whether financial risks or other business instruments are voluntarily insured.

In addition, according to article 941 of the Civil Code of the Russian Federation, it is permissible to use general policies when it comes to the need for multiple insurance of homogeneous property. For example, it can be goods for delivery. In this case, at the request of the client, several general policies can be issued in the name of different people.

Oral contracts

The terms of financial risk insurance are a set of provisions expressing the will of the parties. An oral contract acquires legal force when all the circumstances of its operation are taken into account in it, and the parties are unanimous in their opinion. Contracts concluded in writing have some peculiarities. For example, this is the publicity of the document. This feature implies that the insured must sign an agreement with any subject of law that appeals to him of his own free will and is able to pay insurance premiums. Public contracts in the field of insurance have a limitation period of no more than 2 years.

Methods of insurance of financial risks in the legal field allow the forced conclusion of an agreement through the court, if the insuredrefuses to do so. The basis for this is articles 426 and 445 of the Civil Code of the Russian Federation. In addition, insurance rates should be the same for all customers. Reference to the law - article 426 of the Civil Code of the Russian Federation.

Required conditions

In order for an insurance contract to be legally valid, it must contain the following items:

1. Definition of an insured event.
2. Territory of validity of the insurance contract.
3. Object of insurance.
4. Insured amount.
5. Procedure and terms of compensation for damage.
6. Term of the contract.
7. The policyholder's liability period.
8. Amount and method of payment of insurance premiums.
9. Can I make changes.
10. Types of measures to avoid obligations of one of the parties.
11. How disputes will be resolved.

Also, the contract may contain individual conditions, previously agreed by the parties orally.

The procedure for concluding a contract

In the field of insurance of financial risks associated with property losses, there are various systems that differ in tariffs and the list of services provided. You should not bet on an insurer who is willing to provide low premiums. This may be due to the limited list of services provided.

In practice, there are frequent cases when insurance companies resort to various tricks to avoid compensating for damages. The true indicator of reliability is not the company's experience and not customer reviews, but an assessment of financial stability indicators, a place inindependent ratings and tariff calculation methods.

Some companies offer ready-made tariffs, with others this issue can be discussed individually. Comprehensive property or risk insurance is considered the most reliable method. The detailed procedure for concluding an agreement is regulated by Article 48 of the Civil Code of the Russian Federation.

Definition of an insured event

The Civil Code pays special attention not only to the insured, but also to the victim. Based on the current legislation of the Russian Federation, procedures for compensation for damage are provided:

1. The process of establishing an insured event.
2. Determination of compliance with the conditions specified in the contract.

Evidence base

According to the contract, the insured is obliged to make a decision on compensation for losses, if at the previous stage the fact of the occurrence of this case is established. The following documents should serve as the basis:

• Statement of the victim with a description of the insured event.
• List of destroyed, stolen or damaged property. The financial risk insurance system in this case involves the provision of documents and other evidence of financial damage.
• Insurance act.

If in the case of property insurance the procedure for issuing an act is clear, then in the financial field this may raise a number of questions. Regarding financial losses, these can be accounting documents that record the fact of non-payment of a loan, a certificate from law enforcement agencies about damage, theft or destruction of funds, etc. For the formation of a document3 days are allotted.

Payment procedure or refusal

If a criminal case has been initiated on the fact of an insured event, then the issue of compensation for damage may be postponed until the end of the process. If the event is not insured, compensation is not paid. Written notification of this is sent to the victim.

The company's financial risk insurance allows for an outcome in which the court establishes the culprit who caused the financial or property damage. In this case, a decision is made to compensate for the damage by this person, and the insurer is partially or completely released from the obligation to pay compensation.