Banking insurance: concept, legal framework, types, prospects. Banking insurance in Russia

A stable banking system is the basis of the overall security of the state. One of the levers that allow such stability to be maintained is the introduction of compulsory bank insurance. This system traditionally provides for work in two directions: general insurance and insurance directly bank risks.

Banking insurance in Russia

Under the general concept of insurance against emergencies of buildings in which banks are located, property of banks, vehicles belonging to financial institutions, civil liability of property owners in case of damages to third parties. This kind also includes the social insurance of employees (medical, pension, from accidents, etc.).

The concept of bank insurance is quite extensive. If you consider this includes the protection of banking values, computer equipment, electronic equipment. It also refers to computer fraud. Specialists should also consider the risks associated with the use of plastic cards and loans, including insurance of the banking products themselves and their provision.

Thus, the concept of bank insurance includes the whole range of types of insurance in the sphere of interaction between banking and insurance institutions.

The reasons for cooperation of banks with insurance companies

The need to attract insurance companies to the banking sector is due to several reasons:

• The possibility of reducing the reserve funds of banks to ensure risks;
• The ability to form an objective pricing policy of banks;
• Decrease in the level of expenditure of financial institutions associated with the introduction of internal control;
• Reduction of reputational risks of the banks themselves.

Involvement of insurance companies in the banking sector has a logic as long as the cost of services of insurance companies does not exceed the economic benefit from their work. In addition, unscrupulous firms can create additional risks for the bank.

Legislation of Russia and the system of bank insurance

The legal basis for bank insurance in Russia was laid with the adoption of the Civil Code of the Russian Federation. The main statutory act regulating insurance and bank insurance in particular in the Russian Federation is the Civil Code. The second legislative act in this sphere is the 1992 Law on Insurance, which defines the concepts, puts forward demands on the participants of transactions, forms the legal field of insurance and supervises it.

Important are the laws governing the relationship in medical and pension insurance. A special place in this row is occupied by the laws of 2003 and 2004, which regulate the issues of strictly bank insurance: on insurance of individuals' deposits and on payments of the Bank of Russia to individuals whose deposits were in bankrupt banks.

Thus, we can say that the legal basis for bank insurance in the Russian Federation is based on a sufficient regulatory framework governing the legal relationship of the insured and the insurer. So it turns out to build a civilized partnership of financial institutions and insurance companies in Russia.

Features of bank insurance in Russia

In the Russian Federation, the formation of the banking sector occurred in the 1990s, which led to the emergence of certain features in the cooperation of banks and insurance companies. The root cause of such cooperation was the need to work with problem loans issued by financial institutions. During this period, banks began to insure the loans themselves, shifting the responsibility for the return of problem loans, the share of which in the total loan portfolio was about seventy percent, to insurance companies.

Features of bank insurance in Russia do not abolish the most important provisions on protecting the most profitable sphere of banking activity - lending. Today, the insurance of banking risks in Russia involves mortgage lending, which is due to the interest of banks as beneficiaries. After all, in the event that the client does not cope with his debt obligations, the financial institution receives the full amount of the loan. This also applies to cases when the life of the borrower becomes life-threatening, and the UK lumps out its debt to the bank at a time. In addition, the financial institution receives a commission from the number of contracts concluded with the insurance company by the clients of the bank.

The most important is the insurance of deposits. After all, every investor wants to be sure that his money will be returned. Prospects for the development of bank insurance should lie in the development of deposit transactions. This aspect of the financial system directly affects social stability. Such an approach of guaranteed return of invested funds irrespective of force majeure circumstances contributes to attracting more people's finances to the economy, which implies its further development.

For Russia, this type of insurance is the most productive way of developing the banking, insurance systems and the economy as a whole. The creation of the Fund for Guaranteeing Deposits of Individuals and its functioning is a big step towards restoring public confidence.

The risk insurance of a depositor in the event of bankruptcy of a financial institution is a service that is popular in European countries. This sphere is developing in Russia. After all, not only banks that trust their money to customers, but also people who invest their savings in a financial institution, are at risk. Insurance in this direction has its own characteristics. The bank can protect itself from financial claims in the event that for a number of reasons to return money on the deposit will not succeed. People in turn can not worry that savings will be lost.

The circle of bank customers will be much larger if the financial institution insures the concluded deposit agreements in case of bankruptcy. Unfortunately, to date, not all banks are members of the Deposit Insurance Fund for individuals. In addition, not all customers are aware of the fact that such an organization exists. Financial illiteracy is a huge problem for many people who cooperate with banks.

One of the most actively developing areas is the insurance of plastic card issuers. The main risks in this area are forgery, fraudulent changes, loss, theft.

Not less demanded is banking insurance against so-called computer offenses, which involves the protection of computer systems, electronic data and their carriers. Banking insurance is subject to the values that financial institutions accept for storage: cash, securities, precious stones, metals, artistic values and more.

Also widespread was the insurance of professional liability of bank employees, which allows to compensate losses of customers incurred as a result of the actions of economists of a particular financial institution. Most often, contracts are concluded with cashiers and operators. The insurance event can be a human factor that manifests itself in inflicting damage on the client due to the assumption of arithmetical errors in calculating the exchange rate, interest payments, bank commissions, damage to property, etc.

Types of bank insurance are diverse and depend on the amount of activity of a financial institution. The firm, which has professional insurance partners, enjoys great credit credibility.

What is Bankers Blanket Bond?

The country is the founder of the introduction of bank risk insurance and the development of its basic standards are the United States of America. The first insurance policy on banking risks was compiled there in the distant year 1911. World practice of bank insurance promoted the emergence of comprehensive insurance of banking risks.

Banking insurance abroad is carried out under the comprehensive banking risk insurance system called Bankers Blanket Bond. What does it mean by itself? Comprehensive insurance of banking risks unites the types of bank insurance described above in a single policy. The most developed countries of the world also adhere to the canons introduced by the American Guarantors Association for the banks of the United States of America. The fact that started the development of comprehensive insurance was an insurance policy issued in the system of comprehensive insurance of America before the World War I, which provided bank capital from losses. To date, only in the United States each year, no less than two thousand complex insurance policies for banks are issued.

Bankers Blanket Bond for Russia

Despite the worldwide recognition of comprehensive insurance of banking risks in the BBB in Russia, unfortunately, it is not used to the full extent and has a great potential for development. In favor of this type of insurance is the fact that the use of such a system will allow the banking sector of the Russian Federation to comply with international standards. This, in turn, will attract additional investment from abroad.

However, there is a bank insurance in Russia, which does not apply to the BBB package. This is the protection of property, delicate and contractual liability. This order is due to the need for a more detailed settlement of a variety of issues and allows effective control of risks.

In addition, there is an insurance of loyalty of bank employees, that is, protection of a financial institution from losses that its specialist may intentionally or unintentionally cause. Despite the demand for this insurance product, one hundred percent exclusion of the human factor is a priori impossible. To register in the documents all the possibilities of human intervention in the work of a banking institution is rather difficult. This type of insurance obliges the bank to pass an audit, which will allow it to more accurately monitor the possibility of incurring losses.

One of the components of comprehensive insurance BBB is the insurance of the property of banks: interior, movable property, art, money, securities.

BBB also provides insurance against losses incurred by banks in the performance of operations on forged documents. Such operations are divided into two types: fraud with checks and documents equivalent to them; Fraud with securities (transactions with counterfeit notes).

Requirements for counterparties insurance in the framework of BBB

Proceeding from the above, it is necessary to understand that the BBB policy is a combined type of insurance of financial, judicial and property risks of banks. Thus, the legal framework of the Russian Federation regulates that this kind of insurance puts forward certain requirements for a credit organization that has a license for banking services. It is necessary:

• In the insurance contract, specify all the branches to which this type of insurance applies;
• Take into account that this agreement will not be extended to banking organizations that are partially owned by the insured;
• Take into account that the right of claim for payment in the event of an insured event is exclusively the policyholder.

In turn, the insurer must have a license for insurance of property of legal entities and individuals, as well as financial and business risks.

Characteristics of banking risks in the preparation of an insurance policy BBB

The main and additional risks are divided. The main risks are traditionally theft, damage to the property and the interior of the bank as a result of vandalism or intentional damage by third parties. This also includes damage during transportation.

Additional consider the risks associated with the identification of counterfeiting by a third party of the documents of the insured. An exception for payment of compensation for a comprehensive insurance policy are problems associated with damage to computer equipment, computer programs, computer data. In connection with this, Russian banks practice the purchase of an additional policy designed to cover the insured's losses from electronic crimes. Such an action is justified. The policy covers virtually all damages caused to electronic systems and their data. The cases of insurance losses incurred by the insured against fires, terrorist acts are not subject to insurance.

The duration of the insurance contract for BBB varies on average from one year to five years.

Problems of bank risks insurance

In connection with the economic crisis, some peculiarities have domestic banking insurance. Problems can be solved. The first thing that has affected the crisis is the price of insurance policies. As for financial risks, the transaction cost has increased many-fold. At the same time, it is very cheap to insure movable and immovable property today.

Traditionally, the crisis positively affected the decrease in the volume of this market, but at the same time allowed it to improve. Insurance companies are not flexible enough to develop individual policies, which must take into account certain nuances of each insured.

The development of bank insurance in Russia is possible when studying and eliminating the above problems.

Choosing an insurer for banks

The organization of bank insurance assumes a careful selection of insurers for the implementation of this type of activity.

The main criteria for choosing a reliable partner for banks is their stable solvency, the presence of an extensive regional network, affordable pricing policy, the ability to form flexible contractual terms, a positive experience of smooth settlement of conflict situations. For the cooperation, a company that has been proven by time will be perfect. Only in this case the system of bank insurance will be adjusted correctly.