Insurance products branch II

1. Insurance products � branch II Dariusz Stanko, PhD Katedra Ubezpieczenia SpolecznegoSGH

2. 2 Legal classification of insurance activities in Poland (1) Act of 22 May 2003 on insurance activity  (Jornal of Laws, 16 July 2003 with latter amendments) (Polish ammended version, English old version)

3. 3 Legal classification of insurance activities in Poland (2)

4. 4 Accident insurance � branch I class 5 & branch II class 1 Example � Personal accidents insurance (NNW � results of accidents):- indemnity due to permanent detriment/damage to health (for instance up to 100% of SI, sum insured)- indemnity due to death in accident NW (for instance 50% or 100% of SI)- reimbursement for expenses for prosthetic appliances and auxiliary- reimbursement of professional re-orientation of the disabled Example of �special� insurance policy � individual insurance in the case of bone fracture caused by accident

5. 5 Accident and sickness insurance � branch I class 5 & branch II class 2 Object insured � health, guarantee of benefit in case of illness (i.e. diagnosis or start of treatment), for example a serious illness. Exemplary solutions:basic variant � 8 illnesses: heart failure (nb: very often it is NOT covered by policy, NOR its consequences), surgical treatment of acute coronary syndrome (by-passes), cancer, stroke, kidney failure, Creutzfeld-Jakob�s disease, HIV virus contraction, as former ensuing from performing professional duties, as former due to transfusionextended variant � plus additional 5 illnesses (burns, transplantation of organs, loss of sight, meningioma [m? n�njee ?m?], Parkinson disease)very often � age limits imposed

6. 6 Accident and sickness � when branch I? if the same person insured in supplementary and main insurance insurance of risks must be done on the basis of the same contract that covers main risk  (death, endowment) insurance term should be the same as in the insurance that covers the main risk

7. 7 Casco insurance of land vehicles,(no railway rolling stock) � branch II class 3 Exemplary solutions � coverage:- collisions with other vehicles, persons, animals or objects- third party liability - acts of God (example: flood, fire)- action of thermal or chemical factors- vehicle theft, its parts or its equipment- damage to the vehicle after theft or during theft attemptVery often it is possible to add or deduct coverage options. Very often own coinsurance (cost participation of the insured), liability exclusions. Premium depends on: SI, insurance term, place of living, type of vehicle, engine�s volume, insurance history (claims), insurance coverage, age of insured, length of driving licence.

8. 8 Legal classification of insurance activities in Poland (3)

9. 9 Casco insurance of railway rolling stock,� branch II class 4 Exemplary solutions � items covered:- locomotives- railway (passenger or cargo) cars- multiple units- self-propelled units for maintenance and repair of rails, traction network- rail-road tractors, handcars, work tracks Exemplary risks:- sudden mechanical force impact- catastrophe, fire, lightening, explosion, aircraft downfalls or downfalls of other aerial devices- flood, hail, rain storm, hurricane, avalanche, earthquake- land subsidence or crump, bridge collapse , tunnel collapse - shifting of cargo, collision during cargo loading or unloading, rescue operations

10. 10 Casco insurance of aircraft � branch II class 5 insurance of the aircraft itself (aero-casco) with some other classes insurance policies linked to it: liability arising out of cargo in transit carrier�s liability towards passengers and for their luggage user�s liability towards third parties and their property liability arising from ground maintenance (handling catering; bunkering) personal accident insurance of aircraft crew and other persons employed by the insured recently � insurance of satellites and spaceships

11. 11 MARINE INSURANCE Protection of: commercial maritime foreign cargo trade (by sea or by combined route) maritime fishing sea shipyards (building, trial voyages)

12. 12 Maritime insurance � �perils of the sea� Marine Insurance Act, UK, 1906 � �perils of the sea� being the consequences of forces of nature arising from acts of persons on board arising from acts of third persons (outside the vessel)

13. 13 Maritime insurance � basic types Maritime ships insurance (casco) �for time� �for a voyage� during construction against war and strikes� risks liability of the ship-owner and his/her other financial interests in the property

14. 14 Maritime insurance contract Financial interest rule (premium not necessary to be entitled to indemnity) Indemnity rule (< sum insured) Utmost trust rule (loyalty of parties)

15. 15 Maritime casco insurance � branch II class 6 Standardised policy London Institute Clauses (exclusions, restricting or extending coverage) All risks minus exclusions Policies for a voyage, for time

16. 16 Legal classification of insurance activities in Poland (4)

17. 17 Maritime cargo insurance

18. 18 Institute Cargo Clauses (1) Institute Cargo Clauses (A) > (B) > (C)

19. 19 Comparison of cargo clauses A, B, C (1)

20. 20 Comparison of cargo clauses A, B, C (2)

21. 21 Institute Cargo Clauses (2)

22. 22 Institute Cargo Clauses (3)

23. 23 Mandatory insurance in Poland Mandatory insurance of buildings in agriculture farms against fire and other adverse events (for instance third party liability insurance - stricto) Mandatory insurance of tourist organisers and intermediaries for their clients (example third party liability insurance - largo) Types of mandatory third party liability insurance:

24. 24 Mandatory third party liability insurance for the farmers* (art. 4) farmers� third party liability insurance for damages ensuing from possessing of the agriculture farm - 1,0 ha or specialised production - Arts. 44-58 - farmer, persons employed in the farm (for whose the farmer is responsible) The insurance covers entitles to:the compensation if a farmer, a person staying with him in one mutual household or a person working in the farmer�s farm are liable to compensation for the damage caused in connection with this farmer�s ownership of a farm resulting in: death, body injuries, health distemper, or its loss, property destruction or loss. (Art. 50)

25. 25 Mandatory insurance of farm buildings compulsory insurance of the farm buildings against fire and other fortuitous events - constituting the integral part of this farm building unit having over 20 m2 - Arts. 59 - 77 The insurance covers claims for damages caused by fire, hurricane, flood, hail, lightening, explosion, land sinking, landslide, avalanche, aircraft downfall. (Art. 67)

26. 26 Legal classification of insurance activities in Poland (5)

27. 27 Financial insurance� branch II classes 14-16 Specific features:- does not have to be subject to the law of great numbers- complicated economic processes, difficult to foresee and to identify its factors- strongly related to banking sector (procedures, risk assessment, vindication)- multidimensional risk and its assessment- usually contract for a single risk//entity- premiums usually not based on insurance tariffs but established case by case- monitoring of the client�s financial situation during the contract

28. 28

29. 29

30. 30

31. 31

32. 32 Legal expenses insurance � branch II class 17 Ensures reimbursement of legal expenses in the case when the insured is forced to defence of his rights in a court (as a defendant, suspect, accused or found guilty). The insured has the right to choose a lawyer or legal counsel to represent him or support his interest in a court or administration process

33. 33 Structure of premiums in II branch (2005)

34. 34 Branch II market structure (2006-2007) Table I.15. Gross Written Premiums in Non-Life Insurance by Activity Type, Insurance and Accounting Classes