Risk management

In accordance with the decision of the General Meeting of Members of NCO POVS Insango, the amount of own retention (limit of liability) under the insurance contract concluded by the mutual insurance company cannot exceed 15.0 mln RUB. The limit of own retention may be revised in case of increase of own funds (capital) of the company.

For the purposes of risk transfer”, when concluding an insurance contract in excess of the established limit, NCO Mutual Insurance Company Insango applies reinsurance and coinsurance mechanisms.

Reinsurance
In accordance with clause 5. art. 3 of the Federal Law of 29.11.2007 No. 286-FZ “On Mutual Insurance”: “Obligations of the company on insurance payments (part of such obligations) may be transferred by the company to reinsurance in accordance with the procedure stipulated by the Law of the Russian Federation dated November 27, 1992 N 4015-I “On Organization of Insurance Business in the Russian Federation”. At the same time, the reinsurer who has accepted the company's liabilities on insurance payments (part of such liabilities) into reinsurance may not be a member of this company”.
In accordance with Article 13.3. of the Law of the Russian Federation dated November 27, 1992 N 4015-I “On Organization of Insurance Business in the Russian Federation”:
“1. The reinsurer (insurer) is obliged to cede to the national reinsurance company (RNPC) in reinsurance the obligations on insurance payment under the main insurance (reinsurance) contracts concluded by it, including those falling under the terms of the obligatory reinsurance contract concluded by it, in the amount of fifty percent of the obligations on insurance payment ceded by it in reinsurance, except for the obligations:
1) specified in paragraph 2 of Article 13.2 and paragraph 8 of Article 14.1 of this Law;

2) established by the federal laws on specific types of compulsory insurance and subject to reinsurance in the reinsurance pool provided for by the federal law on a specific type of compulsory insurance;

3) under insurance contracts within the framework of international systems of civil liability insurance of motor vehicle owners, the participant of which is a professional association of insurers, the establishment of which is provided for by the Federal Law of April 25, 2002 N 40-FZ “On Compulsory Civil Liability Insurance of Motor Vehicle Owners”.

2. With regard to the liabilities specified in paragraph 1 of this Article, the national reinsurance company has the right to accept them in the amount specified in paragraph 1 of this Article, to reduce their amount or to refuse to accept them for reinsurance, guided, among other things, by the provision on insurance risk assessment and insurance risk management and the accounting policy of the national reinsurance company”.

NCO POVS “Insango” fulfills the requirements of the federal legislation and strictly sends an offer (offer to conclude a reinsurance contract for insurance payment obligations under the main insurance (reinsurance) contracts concluded by the reinsurer (insurer) to RNPC in the amount of fifty percent of the obligations ceded by it to reinsurance. In case the risk limit of NCO POVS Insango, after acceptance of the offer by RNPC, still exceeds the established limits of own retention (15 million rubles) under the concluded insurance contract of the Company, the excess risk limit is placed by NCO POVS Insango on a facultative basis among insurance (reinsurance licensed) and reinsurance companies of Russia and friendly countries, taking into account their national and/or international credit rating not less than A+.
NCO PIC Insango, adhering to the policy of openness and transparency of relations, discloses the reinsurance panel to its clients (PIC participants) in respect of the insurance contract concluded by them with the company.

In accordance with Art. 6 of the Law of the Russian Federation of November 27, 1992 N 4015-I “On Organization of Insurance Business in the Russian Federation”: “Insurers - insurance organizations, foreign insurance organizations, mutual insurance societies”.

In accordance with Art. 12 of the Law of the Russian Federation of November 27, 1992 N 4015-I “On the organization of insurance business in the Russian Federation”: “Co-insurance is an insurance activity that provides for the conclusion of an insurance contract in respect of the insurance object by several insurers and the insurant, on the basis of which the insurance risks, the amount of the sum insured, the insurance premium (insurance premium) are distributed among the insurers in the share established by such contract.
Russian insurance companies with credit ratings from national rating agencies included in the Bank of Russia's register, not lower than A+ ru according to the national rating scale, act as the main co-insurance partners of NPO POVS Insango.

NCO PIC Insango, as a mutual insurance company, has a unique opportunity to insure property risks in unlimited limits by applying “classical” mutual insurance mechanisms.
As a rule, mutual insurance is most expedient for a group of homogeneous risks held by several participants of one mutual insurance company. For example, shipowners' liability, liability of medical institutions, risks of financial expenses of shipowners to save seafarers' life and health, etc.

In this case, each PIA participant having insurable interest shall sign an agreement on joining the Program of insurance coverage of “homogeneous” risks, the terms and conditions of which shall be developed directly by the participants and responsible persons of NCO POVS “Insango”. It is allowed to create a separate Risk Committee within the framework of development and subsequent control over the Program implementation.

By signing the accession agreement, each PIA participant agrees to the terms and conditions of the Program, the amount and frequency of advance, additional and extraordinary contributions to the company during the policy year under the Program, in turn, the mutual insurance company for a fixed, established in the accession agreement amount of WFD (or approved estimate) provides all necessary activities to support and implement the Program.

NCO POVS “Insango” guarantees to provide the Program participants with a monthly report on the receipt of contributions under the Program, expenditure of funds for the purposes of insurance indemnity and organization of the insurance payments process, as well as for management expenses within the framework of the Program support and implementation. At the end of the year, a report on the results of the Program is approved at the Committee and further at the general meeting of the company's participants.

The financial model of participation in the Program for its participants corresponds to the following formula:
Income

• participants' contributions
• income from investments of the insurance fund
• reinsurance indemnities (if any)

Expenses

• paid losses of participants
• administrative expenses (WFD)
• reinsurance premium (if any)

Income = Expenses

• in case of excess of Revenues over Expenses, a decision may be made to reduce the contributions of the Program participants in the next policy year.

In accordance with Article 18 of the Federal Law No. 286-FZ “On Mutual Insurance” dated 29.11.2007, as well as the Charter of NCO POVS “Insango”, a Member of the company (in the case under consideration - a Program participant) within three years from the date of termination of its membership in the company has an obligation to make additional contributions, if such an obligation arises from the inability to fulfill the insurance obligations of the company, which arose before the date of termination of its membership in the company.

In other words, the final policy year for the Program participants “closes” 2 years after its termination, and each Program participant is obliged to make contributions necessary to fulfill insurance obligations to other Program participants to the mutual insurance company for the whole period.