What is Insurance
Life is always accompanied by various risks. Insurance is one of the financial instruments designed to manage certain risks, thus enabling to avoid or reduce financial loss.
By signing an insurance agreement, the Policyholder transfers the possible financial risk to the Insurer in return to the payment of the predetermined amount (insurance premium). The Insurer undertakes to reimburse the Policyholder for financial losses arising from the agreed circumstances, in the amount specified in the agreement and in accordance with such agreement.
Insurance may be voluntary or mandatory.
Voluntary insurance is based on the agreement between the Insurer and Policyholder. Types, conditions and rules of voluntary insurance are agreed in the corresponding contract.
In case of mandatory insurance, the subject-matter insured, types of insurance and the corresponding rules are determined by the law.
Insurer is obliged to issue a mandatory insurance policy on conditions provided by the law.