Insurance overview

 Insurance overview

Mechanism and terminology

Insurance is a system in which a large number of people share insurance premiums, and when an insurance accident occurs, insurance money is paid to make up for the damage caused. Insurance accidents covered by insurance include various events such as traffic accidents, marine accidents, fires, earthquakes, and deaths, and deal with risks such as incidents, accidents, and disasters that disrupt the stability of human life.

 A contract for the purpose of setting up insurance is called an insurance contract, and as a party to the insurance contract, the person who is obliged to pay the insurance premium is the policyholder, and the person who undertakes to pay the insurance money in the event of an insurance accident. It is called an insurer. The Insurance Law, which will come into effect on April 1, 2010, states that one of the parties has a certain reason for an insurance contract, regardless of the name of the insurance contract, mutual aid contract, or any other name. As a condition, it promises to provide property benefits (in the case of life insurance contracts and fixed-amount insurance contracts for accidents and illnesses, it is limited to payment of money. A contract that promises to pay insurance premiums (including mutual aid premiums; the same shall apply hereinafter) according to the possibility of an event occurring. Is defined. A company that operates an insurance business (insurance business) as an insurer is called an insurance company, and is regulated by the Insurance Business Law (Act No. 105 of 1995) in Japan. In addition, the academic discipline that studies the legal field related to insurance and the laws and regulations related to insurance are collectively called insurance law in a broad sense. In Japan today, insurance is stipulated in the Commercial Code (Volume 2, Chapter 10), etc., and there was no law called the Insurance Law, but the Insurance Law, which is a modern review of the provisions of the Commercial Code, was published in 2008. It was enacted on May 30, 2008, and promulgated on June 6, 2008 (Act No. 56 of 2008).

Mutual aid provided by various mutual aid organizations is a type of insurance. In Japan, insurance handled by insurance companies licensed under the Insurance Business Law is called insurance, and insurance handled by cooperatives, mutual aid associations and other organizations is called mutual aid.

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Insurance is a mechanism based on the idea of ​​the law of large numbers, which is the basic law of probability theory (see the section on insurance principles for details). The law of large numbers is a theorem established in the 18th century, but the sprouting of insurance is the collegium in ancient Rome and the guild in medieval and early modern Europe. , English: guild) and so on. Since then, financial transactions have become more sophisticated among traders with advanced capital accumulation, and marine insurance provided in Italian cities in the latter half of the 14th century has almost the same mechanism as today's insurance contracts.

From ancient times in Japan, there have been systems similar to insurance, such as company storehouses / Yoshikura, Tanomoshiko, Nagagane, and maritime contractors. However, today's insurance began with the introduction of Western insurance systems during the Meiji Restoration. In 1859 (Ansei 6), a foreign insurance company began underwriting fire insurance and marine insurance for foreigners in Yokohama, which had just opened. In 1867 (Keio 3rd year), Yukichi Fukuzawa added "Life Insurance" (life insurance) and "Fire Insurance" as "Disaster Assurance" in the appendix of "Western Travel Guide". The mechanism of "fire insurance" and "marine insurance" (marine insurance) was widely introduced. Soseki Natsume also recommends the spread of the insurance system in his book. In 1879 (Meiji 12), Tokio Marine Insurance Company (currently Tokio Marine & Nichido Fire Insurance Co., Ltd.), and in 1881 (Meiji 14), Meiji Life Insurance Company (currently Meiji Yasuda Life Insurance Company). It was founded and is now fully insured.

Classification

Insurance can be categorized from various perspectives. Here are some examples.

Public insurance operated by the government such as the national and local governments and private insurance operated by private companies (private insurance)

Voluntary insurance voluntarily taken out by policyholders and compulsory insurance required

Public insurance that is part of the social security system and private insurance that individuals voluntarily join

Commercial insurance for profit and mutual insurance for mutual aid

Human insurance (Jinhoken) that covers accidents that occur to the human body such as life, death, injury and illness, and physical insurance (Butsuhoken) that covers loss or damage to things.

Marine insurance that covers damages caused to ships and cargo due to voyage accidents and land insurance that is various types of land insurance

Corporate insurance with companies as the main policyholders and household insurance with individuals as the main policyholders

Public and private insurance

Public insurance includes social insurance, which is insurance as social policy or social welfare, and industrial insurance, which is insurance as economic policy. In Japan, there are the following systems as public insurance.

Social insurance

Health insurance system (employee insurance, national health insurance, medical system for the elderly, etc.

Public pension insurance (national pension, welfare pension, etc.)

Public long-term care insurance

Labor insurance (employment insurance, workers' accident compensation insurance (workers' accident compensation insurance))

Crew insurance

Industrial insurance

Agricultural insurance, fishery insurance, fishing boat insurance, export insurance, etc.

Private insurance is insurance sold and operated by private insurance companies, and mainly deals with life insurance and non-life insurance. Life insurance is insurance that pays a certain amount of insurance money for the life and death of a person, and non-life insurance is insurance that covers damage that may occur due to a certain accident.

According to the Insurance Business Law, insurance companies that sell insurance in Japan are life insurance companies that have received a life insurance business license, non-life insurance companies that have received a non-life insurance business license, and foreign insurers that have been licensed by the Prime Minister. It is divided into insurance companies. In addition, Japanese insurance companies include insurance companies that take the form of joint-stock companies for the purpose of profit (attribution of profit and loss to shareholders) and insurance companies that take the form of mutual aid (attribution of profit and loss to policyholders). There is a company. Mutual companies are a corporate form that is only accepted by insurance companies, and are theoretically positioned as non-profit corporations (intermediary corporations). Currently, mutual companies exist only in life insurance companies, and non-life insurance mutual companies do not exist.

However, the new Insurance Business Law, which was promulgated in 1995 (1995) and came into effect in 1996 (1996), brought the mutual company and the joint-stock company close to each other in many respects, and made the mutual company and the joint-stock company close to each other. The difference between the two is not so large because it is possible to change the organization on both sides (until then, it was possible to change the organization from a joint-stock company to a mutual company). In addition, the new Insurance Business Law stipulates the insurance field (so-called third-sector insurance) that both life insurance companies and non-life insurance companies can handle together. Third-sector insurance is insurance that spans both the life insurance and non-life insurance fields, such as medical insurance, long-term care insurance, and cancer insurance.

Even if it is a private insurance, there are some insurances such as automobile liability insurance (automobile liability insurance) and earthquake insurance that are defined for social policy purposes. In addition, simple insurance (simple life insurance), which was once run by the government, was one of the public insurance. However, since October 1, 2007, Japan Post Insurance Co., Ltd. handles it, so it is classified as private insurance.

In addition, there is insurance called reinsurance. Reinsurance is insurance for the purpose of having another insurer insure part or all of the liability assumed by the insurer under the insurance contract (primary insurance). Reinsurance has the effect of further enhancing the risk diversification function of insurance. Reinsurance is not life insurance because it is insurance coverage, but life insurance reinsurance can be handled by life insurance companies as an exception. Reinsurance is operated as private insurance, and there is also reinsurance as public insurance (Article 3 of the Earthquake Insurance Law).