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Money and credit - Ivanov VM

21.2. Basic concepts and terms

The most commonly used in the insurance the following terms and concepts.

Insurance - This type of civil legal relations on protection of property interests of citizens and legal persons in case of occurrence of certain events (insurance cases) recorded in the insurance contract or by law, at the expense of funds that are generated by the payment of individuals and legal entities of insurance premiums (insurance contributions and property premiums).

Insurers - this, according to the Law of Ukraine "On insurance", legal entities established in the form of stock, complete, commandite companies or companies with additional liability according to the Law of Ukraine "On Business Associations", taking into account the peculiarities stipulated by this law, as well as those who in the prescribed manner received a license for insurance activities.

Policyholders - legal persons or capable citizens who have entered into insurance contracts with insurers or the insured under the legislation of Ukraine. Insurers may conclude an insurance contract with the insurance third party (the insured), which can acquire the rights and obligations of the insurer under the insurance contract.

Insured - the person for whose benefit the insurance contract.

Objects of insurance are the property interests that do not contradict the legislation of Ukraine and are connected:

• life, health, work capacity and additional pension of the insured or the insured (private insurance);

• the ownership, use and disposal of property (property insurance);

• reimbursement of harm caused by the insured person or his property, as well as the harm caused to a legal entity (liability insurance).

Type of insurance is called insurance-specific homogeneous objects in the appropriate volume of insurance cover for certain tariff rates. Specific types of insurance for which a license is issued shall be determined on the basis of established rules of insurance the insurer. Insurers have the right to engage in only those types of insurance, which are specified in the license.

Insurance risk - a specific event, in the event that carried out insurance and that has signs of probability and chance occurrence. Risk - is a particular event or set of events, which occur in the event of payment in advance to create a centralized insurance fund.

Insured event - an event, provided that there was a contract of insurance or law and with the onset of which the insurer is obliged to pay the sum insured to the insurer or the insured.

Sum insured - the amount, within which the insurer in accordance with the terms of insurance is obliged to make payments when the insured event and the amount that is paid for personal insurance.

Insurance indemnity - the amount paid by the insurer under the terms of property insurance and liability insurance when the insured event. Insurance compensation can not exceed the size of the direct loss suffered by the policyholder.

Franchise - part of the losses that are not reimbursed by the insurer under the contract of insurance.

Insurance payment (insurance premium, insurance premium) - payment for insurance which the insurer is obliged to pay to the insurer under the contract of insurance.

Insurance rate - premium rate to the sum insured unit for a certain period of insurance. Insurance rates of voluntary insurance are determined by the shape of the insurer actuarially (mathematically) on the basis of appropriate statistical approach of insurance cases. The specific size of the insurance rate is determined in the contract of insurance with the consent of the parties. With compulsory insurance the Cabinet of Ministers of Ukraine shall determine the maximum amount of insurance payment and the minimum amount of insurance coverage.

The insurance contract - a written agreement between the insurer and the insurer under which the insurer undertakes in the insurance case to pay the sum insured or indemnify damages within the sum insured to the insurer or other person specified by the insured, for whose benefit the contract of insurance, and the insurer undertakes to pay insurance payments on certain dates and to perform other conditions of the contract.