Commercial Insurance Agency Guide

In general commercial insurance is a way of education and management of insurance funds, when this task is created by specialized commercial insurance brokers in the insurance organization, whose purpose is extracting from the insurance profits on the basis of commercial insurance policy. Commercial insurance is a type of entrepreneurial activity. The insurance fund is created by contributions to the charter capital of money and material resources of the founders of the insurance company and by attracting funds from insurers. The differences that existed between the amount of insurance premiums and insurance payments, taking into account the cost of doing business, is profit the insurance organization.

Commercial insurance is built on the basis of risk assessment. The higher the risk is, the higher is the tariff which must be paid. In social insurance such a principle can not apply. Take, for example, medical insurance. It is clear that sicker people are in the age, and if we would perform this type of insurance on a commercial basis, the highest rate would be paid to the old and sick people, which is unacceptable from the standpoint of society. Therefore, in this case, the principle of solidarity is when a public mechanism of social health insurance pays for the sick people.

In the pension insurance the same principle works. If we proceeded from the fact that we need to provide a pension at the International Labor Organization standards - not lower than 40% of lost wages - and went to all insured people in positions of commercial insurance, we would need to take more from those who receive small salary.