The insurance company is responsible for administering insurance benefits. Consequently, the company collects premiums and pays compensation according to the terms of the contract with the policyholder.
People often confuse insurance companies with mutual aid societies. However, these are two entities that differ in both purpose and function. However, these differences are not apparent to customers and policyholders. As an indication, insurance companies are subject to insurance codes. The same code manages how they are created and manipulated.
Therefore, several obligations and procedures must be fulfilled in order to establish an insurance company. Follow the article for more information.
What is an insurance company?
In the event of an event beyond the control of the insured, the insurance company will provide coverage.
Different types of insurance companies
Insurance companies are governed by the Insurance Act. There are three forms of insurance company, depending on how your business operates.
The limited insurance company
Article R321-1 of the insurance law regulates all forms of insurance that a limited liability insurance company can carry out. Overall, it covers almost all types of risks. In the event of damage, fees will be adjusted on a case-by-case basis. An insurance company is essentially a commercial company whose function is to generate profits shared by its shareholders. In addition, it has mutual social capital.
Mutual insurance companies
Unlike joint stock companies, mutual insurance companies are not made up of share capital. In this case, it is more of a comparison fund. In other words, profits are not used for shareholder compensation. The company is formed by the policyholders, also called union members. Members are both insurers and policyholders. For this purpose, it takes the form of a civil partnership, in accordance with the provisions of the insurance law. French law only allows these two forms. On the other hand, the use of foreign companies may lead to the creation of other insurers.
Missions of an insurance company
Insurance companies offer benefits designed to cover specific events in a person’s life. These are damaging events for which the insured is not responsible. They can affect health, life, property, work and even housing.
The main task of insurance companies is to implement products for policyholders. These are insurance products, the coverage that they manage and sell. Thus, both parties, the policyholder and the insurer sign the insurance contract upon completion of the sale. This agreement defines the rights and obligations between the parties.
How to create an insurance company?
How to create an insurance company? This question is often asked. Indeed, certain conditions must be met for the creation of an insurance company. These are the financial situation, the formal conditions and the competence conditions. These are terms related to the professional performance and reputation of the project manager.
To start an insurance company, you must already have proven skills in this field. You must also have an advanced degree in this field.
Additionally, project managers must provide ethical proof.
Finally, he must demonstrate that he acts appropriately in his personal life and in relation to his administrative and financial obligations.
Only under these conditions can he obtain approval from the so-called insurance company. Then, other conditions are posed, themselves linked to the structure of the future company.
The choice of legal form
There are three statuses for opening an insurance company:
- The limited company
- Mutual insurance.
- the union of mutual societies
The status is chosen based on the field of activity in which the insurance company operates. Furthermore, for each status, the insurance code determines the different risks that the company can take. Other legal forms are also possible regarding the constitution of an insurance intermediary company.
As an intermediary, a company can establish itself as an independent entrepreneur or have a liberal status.
Steps necessary for creation
The first step in forming a company is to determine the legal form of the future company. The areas in which an insurance company provides services can be defined from its status. Next, you need to create a business plan. If you choose a company by ac