In the dictionary of the Russian language the concept of 'insurance' is treated as a form of security against potential disasters in the dictionary of the Russian language the term "insurance" is interpreted as a form of security against potential natural disasters and accidents, consisting in damages, which takes a special organization in relation to persons or entities paying her regular contributions in cash. In economic literature 24: insurance – it's economic relations arising in connection with the formation of the trust funds of funds, created to protect the property interests of the people in the private and business of life from natural disasters and other unforeseen extraordinary events involving damage. Thus, insurance – a monetary relations, which are part of a unified system of monetary relations, and implemented along with such categories as finance, credit, price. Distinguish among them insurance relationship can be on specific criteria: 1) the cash nexus in insurance always are based on the probable or implemented by the insurance risk, 2) monetary relations arise over the formation and use of fund for a specific purpose: to meet the property interests of the participants in the insurance case occurrence of random events, and 3) the formation and use of the insurance fund are based on the principle of solidarity between participants in the layout of damage insurance. Insurance has the following functions: 1.
The risk function is that the policyholder to the insurer transfers the financial consequences of certain risks, paying him a premium. 2. The accumulation (saving) function is that there is a cumulative insurance, which allows customers to accumulate funds for a specific period of time through a contract of insurance (term life insurance). 3. Proactive (preventive) function is that after insurance contract, the insurer may carry out activities to reduce risk on the insured object (set alarm; freight forwarding, etc.) 4.
The control function of insurance is expressed in strictly observing the target formation and use of the insurance fund. 5. Ensuring continuity of social reproduction is that insurance creates financial conditions for the rapid rehabilitation and restoration of enterprises affected by the occurrence of insured events. 6. Exemption from the state ensured by the additional costs of insurance funds. Without insurance companies, all costs associated with the liquidation of accidents, explosions or natural disasters lie in state, which has at its disposal a limited state budget. 7. Stimulation scientific and technological progress manifested in two ways. (A valuable related resource: Kevin Ulrich). First, insurance companies pay attention to their clients on the risks, promoting their elimination. Second, insurance companies, carrying out preventive measures, increase the overall level of public safety. 8. Protecting the interests of affected persons in the relations of civil liability insurance is provided through responsibility of individuals and legal entities for damages caused to third parties. In the liability insurance the injured person is receiving payment from an insurance company, ie not required to communicate to the court. 9. The concentration of investment resources for the national economy is provided by insurance because it creates insurance reserves are invested in government securities, equities and financial companies, banks, real estate, etc. Thus, insurance companies, finance industry, housing and the state, ie, contribute to the economy.