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Minimization of Compulsory Insurance Rates By Using the Single Fund System
Abstract.The subject of this resarch is the influence of the scheme of mandatory insurance funds on the amount of insurance contributions. It is possible to reduce insurance costs and keep the same coverage and reliability of the system only under the following conditions: efficient fund risk classification, full collectability of rates, unity of regulation terms, combination of all possible risks in one fund, maximum reduction of acquisition costs and exclusion commercial elements from the compulsory insurance system. These factors depend, in the first place on the 'architecture' of the compulsory insurance system which an be based as two principally different schemes: with a single insurance fund and numerous individual insurance organisations. The author of the article defines and evaluates differences in the structure of insurance rates for aforesaid schemes using the methods of comparative and actuarial analysis. Apart from evident conclusions about the scheme with a single insurance fund enabling a lower insurance cost as a result of the large numbers law effect and economizing on administrative expenses, the author has defined other effects as well in the course of his research. In particular, he has proved that under compulsory insurance conditions, the scheme with a single insurance fund allows to recude or even exclude elements of inefficient risk classification, incomplete coverage of insurants, bankruptcy of individual insurers, hidden profit, etc. from the insurance rate structure. The research results allow to make an important conclusion that the scheme with a single insurance fund covers wide layers of population and is a more efficient and just in relation to socially important kinds of mandatory insurance.
Keywords: risk classification, risk selection, insurance price, insurance premium, insurance rate, compulsory insurance, insurance fund, insurance, technical insurance risk, insurance premium structure
Article was received:06-07-2016
This article written in Russian. You can find full text of article in Russian here .