According to Article 2 of the Insurance Law of People's Republic of China (PRC) (hereinafter referred to as "Insurance Law"), insurance refers to the commercial insurance behavior that the applicant pays the insurance premium to the insurer according to the contract, and the insurer bears the responsibility of paying the insurance premium for the property loss caused by the possible accident agreed in the contract, or when the insured dies, is disabled, is sick or reaches the age and time limit agreed in the contract. This definition of insurance is essentially defined from a legal point of view. From a legal point of view, it is a contractual act. In fact, the insured buys insurance and the insurer sells insurance. In fact, on the basis of equal legal status, the two parties reached an agreement and signed a contract through the process of offer and acceptance, and established the civil rights and obligations relationship between the insurer and the insured.

From the perspective of risk management, insurance is a risk management method or a risk transfer mechanism. This risk transfer mechanism is not only reflected in transferring risks to insurance companies, but also in combining many units and individuals through insurance, so that individuals can cope with risks together, which can spread risks and compensate losses.

From the perspective of economics, insurance is a very effective financial arrangement to share unexpected losses and provide economic security. Buying insurance by paying insurance premiums will transform uncertain large losses into certain small expenditures (premiums), or transform future large or continuous expenditures into current fixed or one-time expenditures (premiums), which will help improve the capital efficiency of the insured. In life insurance, the characteristics of insurance as a financial arrangement are particularly obvious, because life insurance also has the functions of saving and investing, and has the characteristics of financial management. In this sense, insurance companies belong to financial institutions, and the insurance industry is an important part of the financial industry.

2. What are the elements of insurance?

The elements of modern commercial insurance mainly include five aspects.

(a) There are insurable risks.

Insurable risk refers to the specific risk that meets the insurer's underwriting conditions. Generally speaking, insurable risks should meet the following conditions:

1. Risk should be pure risk. In other words, once the risk accident becomes a reality, there is only the possibility of loss, and there is no possibility of profit.

2. There are a lot of homogeneous goals. The adequacy of the number of the subject matter insured is related to the deviation between the actual loss and the expected loss, which affects the stability of insurance operation.

3. The risk should have the possibility of causing great losses. The occurrence of risk should have the possibility of causing heavy losses, and the insured is unwilling to bear it. If the loss is minor, you don't need insurance. In addition, the insurance premium includes not only the loss cost, but also the operating cost of the insurer. Therefore, it is very uneconomical for the insured to pass on small losses to the insurer through insurance.

4. Risk can't make most insured people suffer losses at the same time. This condition requires the occurrence of losses to be dispersed. Because the purpose of insurance is to use the small premium paid by most people to pay the large losses suffered by a few people. If most of the insured objects suffer heavy losses at the same time, the insurance fund established by the insurer by collecting insurance premiums from the insured cannot offset the losses at all. However, in insurance practice, some insurable risks may not fully meet the above conditions, such as floods, earthquakes and other catastrophes, which often cause most insured objects to suffer heavy losses at the same time. Therefore, the insurer tries to disperse the risk units when underwriting, which can not only avoid most of the insured objects suffering heavy losses at the same time, but also ensure that the expected losses are consistent with the actual losses and ensure the stability of the insurance company's operation. In insurance management, part of risk liability can be transferred through reinsurance, and the purpose of dispersing risk units can also be achieved.

5. Risks must be realistic and measurable. In the insurance business, the insurer must set an accurate insurance rate, and the calculation basis of the insurance rate is the probability of risk occurrence and the probability of loss of the insured object. This requires that the risk can be measured. If the occurrence of risks and the losses caused by them cannot be measured, the insurer will not be able to formulate reliable and stable insurance rates, and it will be difficult to operate scientifically, thus making the insurer face huge operational risks. Therefore, if the risk lacks realistic measurability, it can't be insurable.

However, the conditions of insurable risks will also change with the development of insurance technology and the changes of external environment such as market competition and national policies. Of course, we can't completely deny the basic conditions of insurable risks, so as to ensure the scientific nature of insurance management. Therefore, the insurer should not only adhere to the above conditions, but also consider the influence of other factors when defining insurable risks in the business process.

(B) the aggregation and dispersion of a large number of homogeneous risks

The process of insurance is not only the process of risk aggregation, but also the process of risk dispersion. The insurer collects the scattered risks faced by many policyholders through insurance, and when losses within the scope of insurance liability occur, the losses of a few people are shared with all policyholders, that is, the losses are shared through insurance compensation or payment, and the risks of the collection are dispersed. There are two preconditions for the aggregation and dispersion of insurance risks.

1. Lots of risks. On the one hand, the existence of a lot of risks is based on the technical requirements of risk dispersion; On the other hand, it is also a condition for applying the principles of probability theory and law of large numbers to insurance management. According to the mathematical principles of probability theory and law of large numbers, the more sets of risk targets, the more dispersed the risks, the more regular and relatively stable the loss probability, the more accurate and reasonable the insurance premium rate, and the closer the insurance premium amount is to the actual losses and compensation. If there are only a small number of risk targets, there is no collection and dispersion, the probability of loss is difficult to determine, and the law of large numbers cannot play an effective role.

2. Homogeneity of risks. The so-called homogeneous risk means that the risk units are similar in type, quality, performance and value. If the nature of risks is different, then the probability of loss is different, and the risks will not be uniformly dispersed. In addition, the frequency and amplitude of different risks and losses are different. If they are aggregated and dispersed, it will lead to the instability of insurance finance.

(3) Determination of insurance premium rate

Insurance is a kind of economic security activity in form, but in essence it is a kind of special commodity exchange behavior. Therefore, setting the price of insurance goods, that is, setting the insurance rate, constitutes the basic element of insurance. However, the exchange of insurance commodities is a special economic behavior. In order to ensure the interests of both parties, the determination of insurance rates should follow some basic principles.

1. The principle of fairness. On the one hand, the principle of fairness requires that the insurance premium charged by the insurer should be equal to the insurance liability it bears; On the other hand, the insurance premium required to be paid by the insured should be adapted to the risk status of the subject matter insured, or the insured or the insured should share the losses and expenses of the insurance accident according to the risk.

2. Rationality principle. The principle of rationality is the average rate for a certain type of insurance. The insurance premium charged by the insurer from the applicant shall not earn excessive operating profit after deducting the insurance compensation or payment and related operating expenses, that is, the insurer is required not to set excessive rates for obtaining abnormal operating profit.

3. The principle of moderation. The principle of moderation requires that the insurance premium charged by the insurer according to the determined rate should be enough to cover all possible losses and related operating expenses. If the premium rate is too high, which exceeds the ability of the insured to pay the premium, it will affect the enthusiasm of the insured and is not conducive to the development of insurance business; If the rate is low, it will lead to insufficient solvency of the insurance company and ultimately harm the interests of the insured. However, whether the insurance premium rate is appropriate depends on the overall insurance business.

4. The principle of stability. The principle of stability means that the premium rate should be quite stable in a short period of time, which is beneficial to both insurance operation and renewal of insurance for the insured. For the insured, a stable rate can determine their expenses and avoid the pain of rate changes; For the insurer, although the rising rate can make him some profits, the instability of the rate will inevitably cause the dissatisfaction of the insured and affect the insurer's business activities.

5. The principle of flexibility. The principle of flexibility requires that the insurance premium rate be stable in the short term and adjusted appropriately according to the actual situation in the long term. Because in a long period of time, due to the continuous progress and changes of society, economy, technology and culture, the risk status of the subject matter of insurance has changed, and the level of insurance premium rate should also change accordingly. For example, with the progress of medical care and social welfare, the extension of human life expectancy, and the reduction of mortality and diseases, the life insurance rates determined in the past need to be adjusted to adapt to the changed situation. Therefore, in the long run, the insurance premium rate should be adjusted with the changes of various conditions to achieve a moderate and reasonable premium.

In order to prevent vicious competition among insurance companies, some countries have made specific provisions on the way to determine insurance rates. Article 136 of the Insurance Law of People's Republic of China (PRC) stipulates that the insurance clauses and premium rates of the insurance products related to social public interests, the insurance products subject to compulsory insurance according to law and the newly developed life insurance products shall be reported to the insurance supervision and administration institution for examination and approval. The insurance clauses and premium rates of other types of insurance shall be reported to the insurance supervision and administration institution for the record. ? Article 76 of the Regulations on the Administration of Insurance Companies (Revised Edition) stipulates that insurance industry associations may publish guiding insurance rates according to actual conditions. ?

(D) the establishment of insurance reserves

Insurance reserve refers to the withdrawal of a certain amount of funds from premium income or surplus according to relevant government laws or special business needs, so as to ensure the insurer to fulfill its insurance compensation or payment obligations as promised. In order to ensure the normal operation of insurance companies and protect the interests of the insured, countries generally stipulate that insurance companies should deposit insurance reserves in the form of insurance legislation to ensure that insurance companies have solvency commensurate with the scale of their insurance business. Article 98 of the Insurance Law of People's Republic of China (PRC) stipulates that an insurance company shall withdraw various liability reserves in accordance with the principle of safeguarding the interests of the insured and ensuring solvency. The specific measures for the insurance company to withdraw and carry forward the liability reserve shall be formulated by the insurance supervision and administration institution. ?

1. Unexpired liability reserve. The unearned liability reserve refers to the reserve drawn from the unfulfilled insurance liability on the reserve evaluation date, mainly refers to the reserve drawn from the insurance company for the unexpired insurance liability under the insurance contract with the insurance period within 1 year (including 1 year).

2. Reserve for outstanding claims. Outstanding claims reserve refers to the reserve drawn by insurance companies for claims that have not been closed, including reported outstanding claims reserve, reported outstanding claims reserve and claims expense reserve. The reserve for outstanding claims that have occurred, been reported and reported refers to the reserve for claims that have occurred and have been filed with the insurance company, but the insurance company has not yet closed the case. The reserve for outstanding claims refers to the reserve for claims that have occurred but have not been submitted to the insurance company. Claim expense reserve refers to the reserve drawn for the possible expenses of pending claims. Among them, expert fees, attorney fees, loss inspection fees and other reserves. What happens directly in specific claims cases is called direct claims expense reserve; The reserve for expenses that do not directly occur in specific claims is called indirect claim expense reserve.

3. Total reserve. Total reserves (or? Free reserve? ) is a liability reserve used to meet the risk loss that exceeds the loss expectation. The total reserve is drawn from the pre-tax profit of the insurance company.

4. Life insurance liability reserve. Life insurance liability reserve refers to the funds that the insurer accumulates the pure insurance premium and interest income paid by the insured over the years for future insurance payment and surrender payment, or the premium that the insurer fails to fulfill the insurance liability.

(5) conclusion of insurance contracts

1. Insurance contract is a form reflecting the existence of insurance relationship. As a civil legal relationship, insurance is a contractual relationship between the insured and the insurer, which needs to be protected and restrained by a legal relationship, that is, it is fixed through a certain legal form, which is an insurance contract.

2. Insurance contract is the basis for both parties to fulfill their respective rights and obligations. The rights and obligations of both parties are corresponding. In order to obtain insurance compensation or payment, the insured shall bear the obligation to pay the insurance premium; The insurer's right to collect insurance premiums is based on the obligation to compensate or pay for the economic losses of the insured. Whether or not the risk occurs, when it occurs, and the degree of loss are uncertain, which requires the insurer and the insured to perform their respective rights and obligations under certain legal or contractual relations.

3. What are the characteristics of insurance?

help each other

What is insurance? I am for everyone, and everyone is for me? The characteristics of mutual assistance. Under certain conditions, insurance shares the risks that units and individuals cannot bear, thus forming an economic mutual assistance relationship. This kind of economic mutual assistance is embodied in the insurance fund set up by the insurer with the insurance premium paid by most of the insured, which provides compensation or payment to a few insured who suffer losses.

(2) Legal nature

From a legal point of view, insurance is a contractual act, a contractual arrangement in which one party agrees to compensate the other party for its losses. The party who agrees to provide compensation for losses is the insurer, and the party who accepts compensation for losses is the insured or the insured.

⑶ Economy

Insurance is an economic security activity realized through insurance compensation or payment. The object of protection, property and person, directly or indirectly belong to the means of production and labor in social reproduction; Most means to realize the guarantee must eventually take the form of payment currency for compensation or payment; Whether from a macro perspective or a micro perspective, the fundamental purpose of its protection is related to social and economic development.

(4) Commerciality

Insurance embodies an economic relationship of price exchange, that is, commodity economic relationship. This commodity economic relationship is directly manifested in the exchange relationship between individual insurers and individual policyholders; Indirect performance is the exchange relationship between all insurers and all policyholders in a certain period, that is, the relationship between insurers selling insurance products and policyholders buying insurance products; Specifically, the insurer guarantees the normal progress of social production and the stability of people's lives by providing insurance compensation or payment.

(5) scientific nature

Insurance is a scientific and effective means to deal with risks. Modern insurance management is based on scientific mathematical theories such as probability theory and law of large numbers, and the determination of insurance premium rate and the deposit of insurance reserve are based on scientific mathematical calculation.

Fourth, the difference between life insurance and social insurance.

Social insurance is a system that the state or the government provides economic security to all citizens or workers when they temporarily or permanently lose their ability to work, lose their source of livelihood or interrupt their income due to social specific risks such as old age, illness, childbirth, disability, unemployment and death. It mainly includes endowment insurance, medical insurance, unemployment insurance, industrial injury insurance and maternity insurance.

(a) Similarities between life insurance and social insurance.

1. On the premise of risk. The objective existence of personal unique risks is the natural premise for the existence and development of life insurance; The contingency and uncertainty of personal risk lead to the demand for personal risk protection. There is no difference between life insurance and social insurance in this respect.

2. Take people as the object. The object of life insurance and social insurance is human body or life span, but the object of social insurance is determined according to law, and the object of life insurance is limited by the insurance contract.

3. Based on the probability theory and the law of large numbers, the insurance premium rate is established. Both life insurance and social insurance need to determine the insurance rate accurately and reasonably, so the compilation and use of life table is very important for both life insurance and social insurance.

4. Establish an insurance fund as the material basis for providing economic security. In order to ensure that the insured can obtain timely and reliable economic security after personal risk accidents, both personal insurance and social insurance should set up special insurance funds for the premiums collected, and use them according to basically the same investment principles, so as to ensure the preservation and appreciation of insurance funds and enhance solvency.

(B) the difference between life insurance and social insurance

1. Different business entities. The business entity of life insurance must be a commercial insurance company, which is stipulated by the insurance laws of various countries. Article 6 of the Insurance Law of People's Republic of China (PRC) stipulates that insurance business shall be operated by insurance companies established in accordance with this Law and other insurance organizations stipulated by laws and administrative regulations. No other unit or individual may engage in insurance business. ? Social insurance is handled by institutions authorized by Ministry of Human Resources and Social Security.

2. The behavioral basis is different. Personal insurance is a civil act in accordance with the contract. The establishment of insurance relationship is embodied in the form of insurance contract, and the rights and obligations enjoyed by the insurance parties are also based on the insurance contract. Social insurance, on the other hand, is a government act implemented according to law, and the protection of social insurance is the basic right given to citizens or workers by the Constitution. In order to ensure the realization of this right, the state must promulgate social insurance laws and regulations and implement them.

3. Different implementation methods. To conclude a life insurance contract, the principles of equality and mutual benefit, consensus and voluntary conclusion must be implemented. Except for a few types of insurance, most types of insurance are not mandatory in law. On the other hand, social insurance is compulsory. All social members within the scope of social insurance laws and regulations must participate, and there is no choice. Moreover, those who refuse to pay or pay the insurance premium late without reason will be charged a late fee and even be investigated for legal responsibility.

4. Different principles apply. Personal insurance reflects the contractual relationship between the two parties, and the rights and obligations of both parties are equal, that is, the insurer's liability for compensation and the liability for paying insurance benefits depend entirely on whether the insured pays insurance benefits and the amount of payment, that is, investing more and insuring more, investing less and insuring less, and not paying insurance. So, what does life insurance emphasize? Personal justice? Principle. Social insurance, because it is related to the social and economic goals of the government, aims to implement the national social policy and labor policy. What does it emphasize? Social justice? Principle. The payment level of the insured is not closely related to the level of protection. In order to reflect the responsibility of the government, no matter how much the insured pays, the payment standard is the same in principle, and even some people can get social insurance protection without paying insurance premiums.

5. The safeguard function is different. The protection goal of life insurance is to pay insurance money for the damage caused by insurance accidents within the limit of insurance amount. This goal can meet the needs of people at all levels of life consumption, that is, by purchasing life insurance, survival, development and enjoyment can be guaranteed. The goal of social insurance is to protect the basic needs of social members, that is, survival needs, by paying social insurance premiums, so the level of protection is relatively low.

6. The premium burden is different. Paying the insurance premium is the basic obligation of the life insurance applicant. The insurance premium includes not only the expenses of death, disability and illness, but also the business and management expenses of the insurer, and the applicant must bear all of them. Therefore, the charging standard of life insurance is generally higher. The premium of social insurance is usually shared by individuals, enterprises and the government. As for the burden ratio of all parties, it varies with different projects and economic affordability.

Verb (abbreviation of verb) The difference between insurance and relief.

Insurance and relief are both ways to help others to stabilize their economic life. However, the fundamental nature of the two is different.

(1) The subject providing guarantee is different. Insurance protection provided by commercial insurance companies is a kind of commercial behavior: relief includes civil relief and government relief. Civil relief is provided by individuals or units, which is purely an act of charity and almsgiving; Government relief belongs to social behavior and is usually called social relief.

(2) The sources of funds for providing guarantee are different. Insurance protection is based on insurance funds, mainly from the insurance premium paid by the insured, and its formation is also based on scientific mathematics. The state has regulations on the minimum solvency standard of insurance companies. The funds of folk relief are owned by the relief party itself, so the amount of relief funds depends on the relief party's own financial resources. Government aid funds come from national finance, so the amount of government aid funds depends on the financial resources of the country. The source of relief funds limits the time, area, scope and quantity of relief.

(3) The reliability of providing guarantee is different. Insurance restricts the behavior of both parties through insurance contracts, and any party will be punished for breach of contract, so the insured can get timely and reliable protection; Civil relief is a simple temporary charity act, and neither party is bound by law. Especially for the rescued party, his behavior is completely free, and he decides whether to rescue or not, so the protection that the rescued party can get can only be temporary, unstable and unreliable. As for government relief, although it is not a contractual act, it is bound by law. The government can't decide whether or not to provide relief and how much, so government relief is timely and reliable.

(4) The level of protection provided is different. The level of insurance protection depends on the rights and obligations of both parties, that is, the level of insurance compensation or payment depends on the loss; At the same time, it is directly related to the payment level of the insured, so that the actual loss of the insured is fully guaranteed. Rescue is a unilateral act, and there is no relationship between the rescuer and the rescued person. Civil relief is a unilateral act of giving without compensation. The rescued party does not need to undertake any obligation to obtain assistance, so the level of assistance does not depend on the actual loss of the rescued party, but on the willingness and ability of the rescued party. As for government relief, it should be implemented according to law, but the general relief standard is very low, usually depending on the local minimum living standard.

Six, the difference between insurance and savings

Insurance and savings are based on the remaining funds now to prepare for the future, which is the same? Plan ahead? Therefore, the plan embodies a kind of thinking of taking precautions, especially the survival guarantee of life insurance and the survival part of old-age security, which is almost no different from savings. But they belong to different economic categories and have obvious differences.

(1) Different consumers. Consumers of insurance must meet the underwriting conditions of the insurer. After underwriting, some people may be refused or conditionally underwritten. The consumer of savings can be any unit or individual, and there are generally no special conditions.

(2) Different technical requirements. Insurance integrates the risks of most units and individuals facing homogeneous risks and shares the losses of a few units and individuals, which requires special allocation calculation technology; Savings have always used the formula of principal plus interest, and there is no special distribution calculation technology.

(3) The benefit period is different. The benefit period of insurance is stipulated in the insurance contract. As long as the insurance contract is valid, whenever an insurance accident occurs, the insured can get insurance compensation within a predetermined insurance amount, which may be several times, dozens or even hundreds of times the premium paid. Savings benefit from debt service. Only after a certain period of time can depositors get the expected income, that is, the stored principal and interest.

(four) the nature of the behavior is different. Insurance The insurance fund set up with the insurance premium paid by all insured persons provides compensation or payment to a few insured persons who have suffered losses, which is an act of mutual assistance; Saving is a self-help behavior that individuals set aside a part of their property for future needs without asking for help.

(5) Different consumption purposes. The main purpose of insurance consumption is to deal with the economic losses caused by various risk accidents; The main purpose of saving is to obtain interest income.