Bankruptcy of insurance organizations

Bankruptcy risk insurance

The risk of bankruptcy is understood as the possibility of an unexpected onset of an unfavorable financial condition, subsequently leading to the insolvency of the legal entity. When comparing internal and external risks, most often the former become the cause of insolvency.

An insurance policy guarantees compensation for damage from internal and external circumstances. Insurance is a type of civil relationship for reliable business protection. Depending on the type of activity, insurance companies offer services to satisfy each client. Service packages are selected for each organization depending on factors, among which the main role is played by the company's assets.

Deputies propose to insure workers against company bankruptcy June 19, 2019

Business expenses will not increase, but he does not want to pay for bankrupt companies

Businesses may face a new type of compulsory social insurance - in case of inability to pay wages due to bankruptcy. The State Duma sent such a bill to the government on Tuesday, as indicated on the website of the Committee on State Building and Legislation. The author of the bill is committee chairman Pavel Krasheninnikov.

Now, wage debts accumulated at the beginning of bankruptcy are repaid according to the law in the second place. But in fact, this is the seventh stage - after five stages of current payments and creditors of the first stage (compensation for harm to life and health), workers often get nothing, says arbitration manager Evgeniy Semchenko. Even if there is money left in the bankruptcy estate, workers have to wait a long time - the bankruptcy procedure lasts at least 13 months, he says.

The bill proposes to finance the cost of payments to employees from the Social Insurance Fund (SIF), which will receive money in the form of mandatory business contributions. Current tariffs for companies will not increase - new contributions will be allocated from existing ones, and tariffs are proposed to be distributed as follows: for pension insurance - 22%, for temporary disability insurance - 2.9%, for temporary disability insurance for foreigners and stateless people - 1, 78%, for compulsory health insurance - 5.1%, for employer bankruptcy insurance - 0.02%. It turns out that money for insurance of bankrupt employees has been proposed to be taken from contributions for insurance of foreigners.

Upon receipt by the Ministry of Labor, according to its representative, the bill will be considered in the prescribed manner. The secretariat of Deputy Prime Minister Tatyana Golikova, who oversees the social bloc, the Ministry of Finance and the Ministry of Economic Development did not receive the project, their representatives say. Their colleague from the FSS declined to comment. It was not possible to contact Krasheninnikov yesterday. The idea of insuring wages is not new; it was last discussed in the spring of 2016.

The number of bankruptcies is growing: according to the Ministry of Labor, cited by the committee, in 2020 there were 608 companies in bankruptcy with a total wage debt of 4.7 billion rubles, and in the first quarter of 2020 there were 861 of them with 5.6 billion rub.

Bankruptcy with wage debts is the most difficult, because the owners and managers of the enterprise may face criminal liability for non-payment of wages, and such cases are under special control of the prosecutor’s office, says Semchenko. Any arbitrariness on the part of employers is strictly suppressed by labor legislation and judicial practice, confirms Dmitry Nesvetov, a member of the board of Support of Russia.

If such debts are paid from a separate fund, then workers will benefit, and bankruptcies will accelerate, Semchenko believes. The employee should not share the employer’s commercial risks: the new insurance will provide guarantees to the employee and will not increase the burden on the business, the project is supported by Ekaterina Avdeeva, chairman of the committee for the development of legal services and examination of bills of Business Russia. But it is necessary to limit such payments depending, for example, on the average salary in the region, so that insurance premiums are really enough and there are no people who would like to artificially receive this money from the state, warns Semchenko. The bill sets a limit - insurance payments can only be received three months before the start of the bankruptcy procedure. The arbitration manager will need to apply to the FSS for them.

All contributions to the Social Insurance Fund are targeted and aimed at solving legally established tasks, reminds the Vice-Rector of the Academy of Labor and Social Relations Alexander Safonov. There are no free funds in the fund and their redistribution will deprive other people in need of support, he notes: “If payments to foreigners suddenly increase, where will the fund look for money?” In addition, these are functions unusual for the FSS; the administrative burden on the fund will increase. There are almost no countries in the world where social insurance covers non-payment of wages. It is necessary to develop other mechanisms to combat debtors, he is sure.

The bill contains a vicious idea - solving the problems of some entrepreneurs at the expense of their solvent colleagues, General Director Evgeny Potapov is indignant. There are no advantages for business, the President of the Chamber of Commerce and Industry Sergei Katyrin is convinced: wage arrears due to bankruptcies are quite small. There are other risks associated with wages, says Nesvetov: “Why not insure, say, against wage reduction, against non-payment of bonuses, against fines?” And the increase in bankruptcies is associated with the weak state of the economy, he notes. It is necessary to fight the increase in bankruptcies, Avdeeva supports.

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Bankruptcy Insurance

Owners of large businesses benefit from small and medium businesses. For them, insurers offer individual service packages, while the latter are content with standard services.

Insurance reliably protects a company from bankruptcy:

property;
downtime;
liability of the company's management to third parties;
personnel;
responsibility for quality, etc.

In addition to liability insurance, it is advisable to insure bank deposits.

For tour operators, Federal Law establishes the obligation to insure liability to clients. If the insurance agent does not fulfill the obligations stipulated in the contract, the client is reimbursed.
There are no provisions in the law about insuring the risks of bankruptcy of tour operators themselves. Tour operators only insure their civil liability. When the obligations assumed by them are not fulfilled (also when declared bankrupt), compensation is paid by the insurer or the bank that has become the guarantor for the company.
Regarding developers, the Law “On Participation in Shared Construction” poses a risk of bankruptcy, and they are required to insure liability to shareholders.

Bank management chooses to insure not their own risks, but rather the money of depositors. The total capital of a credit institution is not subject to insurance.

Types of insurance

After the collapse of the Soviet Union, the first classification of types of insurance on the territory of the Russian Federation was the one approved by Rosstrakhnadzor in 1994. But before we talk about types of insurance, let’s define the term itself. This is insurance of individual objects in a certain volume and at established rates.

There are several types of insurance, each of which has its own characteristics.

The classification criterion for such types is the object of insurance and the insured risks. Here are the types that stand out:

property insurance (individuals and legal entities can enter into contracts in order to provide protection against any risks to their property. This includes insurance of real estate of all types, vehicles, cargo, etc.);
liability insurance (the object is the property interests of third parties. This includes compulsory motor liability insurance, liability insurance of the manufacturer, directors and officers, employer, Green Card, etc.);
personal (this includes all types of insurance related to any events in the life of an individual citizen that are related to his health, pension, ability to work, etc.);
insurance of specific and financial risks (failure to fulfill financial obligations, political risks, etc.).

Of course, due to changes in the insurance market, which are simply inevitable, various additional types and subtypes appear. So, since 2012, such a type of insurance as public insurance has been allocated. This is the provision of insurance to the owner of a dangerous object for damage in the event of an accident involving this object.

Names of all types are formally assigned, by order of the Ministry of Finance of the Russian Federation, and are used by the Central Bank of the Russian Federation, the Federal Social Insurance Fund, etc.

Conditions for payment of insurance compensation

To obtain an insurance policy, a legal entity enters into an agreement with the insurer, in which the “red” line defines the conditions for payment of insurance compensation:

an insured event occurs when the organization is unable to pay debts to creditors within three months;
When an arbitration court makes a decision to introduce bankruptcy proceedings into a company, the insurance company also pays compensation. The payment period is determined immediately after the opening of the case.

Signs of bankruptcy

They are established in Art. 183.16 Federal Law No. 127. The bankruptcy procedure of insurance organizations is initiated if:

The total amount of claims made by creditors for monetary obligations, for the payment of severance pay or wages for citizens working (working) under employment contracts, or the total debt to the budget is at least 100 thousand rubles, and these requirements are not met within two weeks from the day of their execution. Obligations to employees must be confirmed by judicial acts that have entered into force.
The decisions of the arbitration tribunal or the general jurisdiction authority, according to which the IL (writs of execution) were issued for the forced execution of the decision of the arbitration tribunal to foreclose on the funds of the financial organization, have not been executed. The amount of creditors' claims does not matter.
The value of the company's property/assets is not enough to pay off obligations to creditors and the budget.
The activities of the provisional administration did not lead to the restoration of solvency.

Sample application for bankruptcy of an insurance company

The control body indicates in the document:

The name of the court in which it is filed.
Insurance company name, address, identifying information. The latter include the number of the state registration record in the status of a legal entity, TIN.
Name of the control structure and its address.
The volume of claims for monetary obligations, the amount of debt for contributions to the budget, the value of assets (property) or other information relevant to the proceedings of the case.
Full name of the arbitration manager, name and address of the self-regulatory structure in which he is a member, or the name of the organization from whose members he must be approved, its address.
List of applications.

The statement of the provisional administration contains almost similar information, with the exception of a number of points:

Instead of the name of the control body, the full name of the head of the temporary administration, the address to which correspondence will be sent to him, and details of the document confirming the approval of the person in this position are indicated.
The name of the self-regulatory structure and its address are indicated if the head of the administration is an arbitration manager.
Information about the candidacy of the bankruptcy trustee, if, in accordance with Federal Law No. 127, it is not the Deposit Insurance Agency.

Features of bankruptcy of an insurance company

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As a result of the analysis of the plan to restore solvency or based on the results of an on-site audit, signs of insolvency may be identified. In such cases, the supervisory authority files an application for bankruptcy of the insurance organization (a sample document is presented in the article).

If a legal entity carries out insurance related to the activities of a trade union of insurers or another organization entrusted with the responsibility for transferring compensation payments, the manager must send a notification to these structures within a week from the date of occurrence of grounds for implementing measures to prevent bankruptcy. The corresponding provision is fixed in part 4 of Art. 184.1 Federal Law No. 127.

When carrying out the bankruptcy procedure of an insurance company, trade unions bear responsibilities and exercise the rights provided for by law for financial structures.

Transfer of insurance portfolio

Beneficiaries and policyholders must be notified by the interim administration, the bankruptcy trustee or (if they are not appointed) by the insurance company itself of the upcoming transfer of the portfolio. The notice is published in the manner prescribed by Art. 28 FNo. 127, no later than a month before the procedure.

The notice must contain the following information:

Name of the company transferring the insurance portfolio, state registration number in the status of a legal entity, TIN, address.
Reasons for performing this operation.
Information on the suspension/limitation of powers of the executive structures of the organization transferring the portfolio.
Name of the management company, identifying characteristics (TIN, state registration number), address.

Attachments to the application

In addition to the documents, the list of which is fixed by the APC, the following are attached to the application:

Constituent documentation of the insurance company, state registration certificate in the status of a legal entity.
Balance sheet as of the last reporting date or documents replacing it.
The decision of the control structure to send an application to arbitration drawn up by the temporary administration, if Federal Law No. 127 does not establish that it should be accepted by the administration itself.
A report on the value of all property of the insurance company, generated by the appraiser (if such a document exists).
Conclusion on the financial condition of the insurance company, if the application is submitted in accordance with Art. 183.13 Federal Law No. 127, or a report on the work of the temporary administration, if the appeal to the court is sent in accordance with Art. 183.14 of the same Law.
Other documents provided for by Federal Law No. 127.

We invite you to read: Fictitious bankruptcy of individuals

Case review

Proceedings of bankruptcy cases of insurance organizations are carried out in an arbitration court. In this case, the provisions of the APC and Federal Law No. 127 apply.

An application to declare an insurance company insolvent is accepted by the court if at least one of the above criteria is present. In the event of bankruptcy of an insurance company, when assessing its financial condition, its obligation to make compensation payments, as well as to deduct part of the premium in case of early termination of the insurance contract, is taken into account. The obligation must be established by federal law, an enforceable court order, or an insurance agreement.

When initiating bankruptcy proceedings for an insurance company at the request of the temporary administration, the duration of the proceedings should not exceed 4 months. from the date the application was accepted for consideration. This period includes the time allotted for preparing materials and making a decision.