Risk management in insurance vs discrimination

Ranaldi, Valentina and Kostić, Jelena (2023) Risk management in insurance vs discrimination. In: Prouzrokovanje štete, naknada štete i osiguranje. Institut za uporedno pravo, Beograd, pp. 369-385. ISBN 978-86-82582-02-1

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Abstract

Risk management in insurance companies is a very important component of coroporate governance. Based on a timely, accurate and adequate assessment of risks, it’s possible to take the necessary measures to reduce them or eliminate the possibility of their realization, with the aim of preventing the solvency of the insurance company and its efficient operation. A reasonable risk assessment, taking into account all relevant criteria, is an important requirement from the Solvency II Directive, with which it’s necessary to further harmonize regulations at the national level. Risk management involves identification, assessment, proposing measures to reduce and eliminate risks and reporting to competent aurhorities on the measures taken. When assessing risk reduction measures in insurance/reinsurance companies, not only internal acts and regulations from the field of insurance, but also general acts that aren’t from that area should be taken into account. A special problem in the field of insurance is the application of discriminatory criteria with reference to statistical data when determining the conditions or insurance premim rates. However, such behaviour is a violation of the prohibition of discrimination, which is stipulated in both international and national regulations. In this paper, we first point out the importance of the risk management function and the compliance of national regulations in that part with the Solvency II Directive, and then we analyze cases of discrimination in the field of insurance in order to provide recommendations for possibly overcoming such situations at the level of insurance/reinsurance companies, bearing in mind that exclusion of a certain group from insurance solely on the basis of its personal characteritistics is an act contrary to the Constitution and the Law on Prohibition of Discrimination.

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