Sustainable development between insurance and entrepreneurship

Transcription

1 Sibiu Alma Mater University Journals. Series A. Economic Sciences Volume 8, no. 2/ 2015 Sustainable development between insurance and entrepreneurship Decebal - Manole BOGDAN "1 December 1918" University of Alba Iulia, Romania, Gabriel Bethlen Street, no. 5, Alba County, Romania decebal.bogdan@uab.ro Abstract Sustainable development is achieved when there is balance between the environment and sustainability, entrepreneurship (economic environment) and society (social environment). Entrepreneurial activities aim to make a profit by businesses that use rationally the environment. Subsequent management and strategy development are not sufficient elements to achieve that profit. Sustainable development requires efficient use of environmental resources (raw materials, water, air, soil, subsoil, chemical, biological and radioact ive substances, etc.). For risks that disrupt economic activity such as natural disasters, fire, accidents, explosions, floods, etc., the management company may in some cases measures to limit the effects of these risks, but cannot annihilate. A successful business will be business development which is backed by ensuring potential risks. Keywords: sustainable development, ensuring profits, providing heritage insured risks, property damage, business plan, insurance, environment. Rezumat Dezvoltarea durabilă se realizează atunci când există echilibru și sustenabilitate între mediul înconjurător, antreprenoriat (mediul economic) și societate (mediul social). Activită țile antreprenoriale au scopul de a realiza profit prin activități economice care să utilizeze im mod rațional resursele de mediu înconjurător. Managementul corespunzător și strategia de dezvoltare nu sunt elemente suficiente pentru realizarea acestui profit. Dezvoltarea durabilă impune o utilizare eficientă a resurselor de mediu (materii prime, apă, atmosferă, sol, subsol, substanțe chimice, substanțe biologice si radioactive, etc.). În cazul riscurilor ce perturba activitatea economică cum ar fi: calamități naturale, incendiu, accidente, explozii, inundații, etc., managementul companiei poate lua în unele cazuri masuri de limitare a efectelor produse de aceste riscuri, dar nu le poate anihila. O afacere prosperă va fii afacerea care în dezvoltarea sa este dublată de asigurarea riscurilor potențiale. Cuvinte cheie: dezvoltare durabilă, asigurarea profitului, asigurarea patrimoniului, riscuri asigurate, pagube, plan de afacere, asigurări, mediu înconjurător JEL Classification: Q56 Introduction Research goal: our research topic to the attention concept of sustainable development which is achieved through the balance of three factors (economic, social, human and environmental) can be enhanced by commercial insurance. Any economic activity is subject to risks that can cause property damage, financial, environmental and patrimonial damage nature. The equivalent damage on the one hand generates loss of profit, additional costs and environmental restoration and bringing assets to an initial standard and collateral damage of position in the market. The research attempts to reveal some elements to identify the relationship between contractors and insurance. If this relationship is properly addressed, it will determine the sustainable development of both the business itself and the business environment. We systematically tackle productive activities, services, agriculture and the liberal professions, the need for protection from risks, costs and informational systems. Materials and methods The expressions of sustainable development in relation to entrepreneurship and business insurance What does private economic activity with a business plan and insurance have in common? Entrepreneurs are operating on a complex market that generates many challenges. 20

2 Decebal - Manole BOGDAN - Sustainable development between insurance and entrepreneurship Market, most often, is flawed in economic performance competition, sometimes unfair, saturation (plus production), lack of financial liquidity, economic factors - financial and environmental factors. Entrepreneurial risks can be largely predictable and with a good strategy can be avoided, however, expected profit generating business activity. The market in which entrepreneurship can act vitiated by risks that is not under the control or control human factor. These risks related to unexpected accidents, natural disasters, earthquakes, fires, risks that cannot be predicted on the geographic location of the event, that the intensity of the harm and damage size. Economic actions carried out on this land, uncertain, subject to risks leads to a business called insurance. The first who identified the need and insurance protection were ships owners. Economic activity, by definition must generate profit to the investor, due to the difference between effort and effect. What is insurance? Risk carriers, the entrepreneurs who are buying protection from insurance companies for a sum of money called premium package and sell at a time the estimate potential of damages or not. If risks are not produced, so there will be no damage, the contractor will have a scheduled loss of between 0.1 to 8% will be passed on tax-deductible costs. State tax deductibility just accepts the insurance that protects and taxable income in the future. If the insured risk causing harm, the contractor will have fluency in trade, it will be preserved heritage and reunified the insurance company will achieve profit goals. On a practical level, enrollments in the insurance company s premium costs determine normal functioning of entrepreneurial activity of production and services for sustainable development. Some researchers (Cristina C., 2001, p. 59) believe that insurance companies trade policy has shifted from the optical optics customer product generating insurance products according to customer need, entrepreneur. Productive and insurance activities Entrepreneurs who are focused on the production of goods can be protected in daily activity by insurance? It is known that manufacturing activity presupposes the existence of assets consisting of technological production lines, buildings, warehouses, raw materials, human resources, financial resource, all coordinated and managed under a management that integrates resources, generates and places the product on the market. Heritage may be affected by fires, floods, earthquakes, falling objects, explosions, electricity action. These risk factors disturb the assets and generate production stoppage. The phenomenon generates economic losses or even insolvency of economic entity. 1. Solutions. Business owners assume the damage and rebuild or repair the damage. The solution to repair / rebuild with own funds (reserves / reservations) is popular, generate high costs and a certain size do not deserve replenish the existing structure. A second solution is limited to activating a bank credit lines and / or the contracting of a new bank loan. The solution based on predictive minimum cost is found through a contract of insurance. 2. Management is cautious and responsible. Under the insurance contract which pays a premium to the installments or in full, the insurer compensates for the equivalent financial losses, allowing the contractor at no cost recovery structure and continuation of the initial parameters. 3. Mechanisms. Contractor complete insurance be based on a direct contractual assurances in favor of the insurer who presented compelling offer is an auction based organization that responds offer a specification drawn. Unfortunately, entrepreneurs and / or their servants select collaboration with insurance score based on subjective criteria. Some criteria for placement of an insurance risk based on: motivated by commissions received from the insurer, the lowest price of the insurance or insurance company PR. Low frequency of these objects insurable risk (1-3%) represent only rarely damage. By this 21

3 Sibiu Alma Mater University Journals. Series A. Economic Sciences Volume 8, no. 2/ 2015 statement often we note that on the basis of selection of popular insurance company, we make wrong but economically comfortable. In the event of damage that may occur, rarely, if ever, there is a high probability not to be compensated and to suffer financial loss as a result of contingency. 4. Solutions. Experts (Julian V., Florian B., 501) say unanimously that you can speak to an insurer about solvency only in situations in which assets are greater than liabilities arising from existing and potential insurance contracts entered into with policyholders. Thus, we propose a minimum set of indicators: selecting whichever insurer held technical and capitalization, even if the insurance is more expensive; in case of very large active is indicated knowledge of the reinsurance program (provision insurer); for very large targets recommends two companies ensure brand. Working with the two companies can negotiate the right price and can be given against an insurer example when you have quality insurance services from one of the insurers; it is prohibited to make provision by servants or relatives as intermediaries insurer (insurance agents, brokers, etc.), since any error on the insurance contract will be speculated by the insurer. Failure to settle the claim financial burden will be placed collaborator (insurance agent) that has the quality and the agent of the insured and paid compensation to a contract incorrectly drafted intermediary will recover from liability based on materials of the Labor Code or Civil Liability the Civil Code. In conclusion, the principal, insured receives compensation which will be recovered through an intermediary setback. 5. The procedure of drawing up the insurance contract: - Contractor completes a claim which states its desire to secure and protect their business for sustainable development through insurance. The statement of assurance is done either at identifying the need for insurance, or in response to banks or other lenders claim to be protected by insurance pledged assets or simply in response to the offer made by the insurer. - The insurance company identifies risks through a community questionnaire to be filled statement of contractor. The questionnaire to be completed by the insured management includes a series of questions that classifies risks and assess community assets. - After interpreting the DAS and the questionnaire with questions, the analysis is done and the costs of insurance premiums are set to be underwritten. - Details so agreed, leading to the insurance contract. With the conclusion of the contract is agreed policy conditions which must be signed and commitments and identify the existence and maintenance status of goods provided by generic action "risk inspection". The activities of transport of raw materials and finished products in relation to security It can also provide raw materials, materials, finished products? Some raw materials arrive on the technological transported 1 from a supplier with a third party transport company, the beneficiary. During transport from the manufacturer to the warehouse beneficiary raw materials, can be provided. If an event happens during transport it is the responsibility of the transport company (road, rail, water and air). Responsibility for the integrity and quality is maintained during transport belongs under the 2 Geneva Convention, the carrier. Entrepreneurs must know that surplus value 3 is the responsibility of the transport company and must make an extra insurance or to create a provision for contingencies. It should be realized that during transport losses and the wastes generated by stacking, packaging, wrapping, anchoring the carrier but are not charged to the sender. Solutions. At the conclusion of the transport contract will require the company providing 1 Raw materials, materials, half-finished, finished products cannot be transported ensure deposits with fixed assets, inventory items and means of production 2 May 19, 1956 Convention on the Contract for the International Carriage of Goods by Road, signed at Geneva 3 Convention on Civil Liability considers that the obligation consideration transported goods, but not more than the equivalent of SDR 8.33 / kg cargo. 22

4 Decebal - Manole BOGDAN - Sustainable development between insurance and entrepreneurship transportation services, proof of insurance. If the cargo is easy, but expensive, seek additional coverage through insurance carrier or insurer will require insurance for uncovered surplus of CMR insurance - carrier. Claims on carrier and subsidiary of the insurer's partner carrier can expand and commercial effects of loss of profit, stagnation of production etc. Accident Insurance for Employees A company can be protected for employees or heirs requests for financial effects derived from bodily injury or death from accidents at work? Human resource consists of employees and a persons employed in the company's management is ensured by binding budget law (social security, risk, unemployment, pensions, etc.). Entrepreneurs can place effects of accident risks (disability and / or death) an insurance company not to generate high costs for labor accidents that cause injury, death or damage to nature generically called patrimonial damages. Placing risk of accident can be done by individual or collective insurance policies. Measure to conclude an insurance contract for accident cases lend themselves especially in continuous flow production units with common hazards of injury and with a great action territoriality of employees. Procedure. The insurance policy ends at the request of the contractor who is required to nominate employees with identifications to be sure. The insurance policy ends after payment of insurance premiums and issuance conditions are concluded insurance. Companies providing services and insurance. What could be the relationship between a company that provides services do not work with stock so it has large assets and business insurance? Entrepreneurs providing services to clients to meet both service quality and to third parties through which direct or indirect harm them. Insurance companies generated insurance offers for any activity that service provided. The starting point is the turnover, as there is a good evaluator to generate value contract. The limit of liability, since we are talking of a legal liability for the acts of its servant s entrepreneur and generates damages to third parties may be established for a single event or for the whole period. It is estimated (Irina S., 2009, p. 288) that liability insurance has a double function to ensure responsible policyholders and third victim. Procedure. Following a request made by the contractors insurance, the insurer inquires about the causes of potential risk and sets the price risk. If such prices are agreed, the insurance contract shall be concluded and any event will cause damage, it shall be settled by negotiation tripartite insured - insurer - injured. Liberal professions and the need to ensure Persons who show activity as authorized independent doctors, notaries, lawyers, accountants, appraisers, small private entrepreneurs have reason to be insured? Self-employed people generating revenue at a time may record losses arising from errors occupation. Customer claims for compensation for material damage and / or patrimonial nature may affect the welfare of the 4 entrepreneur. In persons performing professions to bid insurers insurance products are: doctors, pharmacists, lawyers, auditors, notaries, bailiffs, etc. In fact takeover offer is made up of professional legal liability risks to customers, third parties. Procedure insurance contract: freelancers make an insurance claim and identification data indicating the potential risks and past, if applicable. Under the agreed limit of indemnity insurer calculates the premium. The beneficiaries of services provided by individuals or independent individuals have the guarantee that they receive financial compensation for damages caused by negligence, error, fraud. There are insurance companies that extend the insurance period insurance contract retroactively up to 36 months. This means that the insured is protected and that the product 4 Entrepreneurs in the sense of independent individual or authorized 23

5 Sibiu Alma Mater University Journals. Series A. Economic Sciences Volume 8, no. 2/ 2015 causes damage in the past, up to 36 months, but the complaint in court is the year of insurance. Compulsory information in insurance contracts. The insurance contract is governed, on the one hand, the Civil Code and regulations deriving from it, and on the other hand the rules for each branch of insurance (goods, people, civil liability) without ignoring the intentions course and the aim of every insurance company in a competitive (CR Lazarus Cistelecan, p.65) market. Policyholders are entitled to be informed correctly, since the phase of the contract in advance on all conditions of the insurance contract 5. The information must be provided by the insurer on paper to the potential client on another durable medium before the conclusion of the insurance contract through a separate document or multiple documents. These documents can be sent to potential client including by means of distance communication in a way to confirm that they had read those documents. The insurance contract and insurance conditions will be drawn up in writing, visible and easy to read, use a font size of at least 10 on paper or on another durable medium, at least two copies, the original being sent a copy of each parties. The background color of the paper on which are written and conditions of the insurance contract must be in contrast with the font used. The legislation states expressly 6 situation for distance contracts, the customer can require communication conditions and contractual provisions in writing on paper or any durable medium available and accessible to the customer in time, before it have 5 RULES of 15 December 2009 on the information that insurers and insurance intermediaries must provide to customers, and other items that must be included in the insurance contract, published in the Official Gazette number 908 dated 23 December ORDER. 1 of 9 January 2012 amending and supplementing the Norms regarding the information the insurers and insurance intermediaries must provide to customers, and other items that must be included in the insurance contract, implemented by Order of the Insurance Supervisory Commission no. 23/2009 obligations under the signature of a contract distance or insurance acceptance of an offer remote. General information on deductions in the tax law applicable to contracts both in life assurance and in the case of goods or civil liability insurance, insurers and insurance intermediaries are required to provide customers with a copy of the draft contract and conditions of insurance. The information that insurers must provide the insured must be in Romanian or in another language if customers demand it in writing. Before concluding an insurance contract insurers are obliged to hand over customer documents it must contain at least the following information about the insurer: a) the name and legal form of the insurer; b) the number of register of insurers, reinsurers and brokers in insurance and / or reinsurance brokers; c) the registered office and, where appropriate, the address of the branch or agency which concluded the contract of insurance, and telephone number; The information must be submitted insurance contract: a) definition of each insured event, the insurance indemnity if the insured event; b) insurance exclusions; c) the start and the termination of contract; d) the modalities of execution, suspension or termination of contract; e) information on any rights the parties may have to terminate the contract early or unilaterally, including any penalties imposed by the contract in such cases; f) how premiums are paid and payment of insurance premiums; g) the modalities and terms of payment of the insurance indemnities, the redemption amounts and insured amounts; h) information about the grace period; i) to settle any disputes arising from performance of the contract, respectively information about how to resolve amicably the claims made by policyholders or beneficiaries of insurance contracts, where appropriate, they constitute a restriction on the right of the client 24

6 Decebal - Manole BOGDAN - Sustainable development between insurance and entrepreneurship to resorting to judicial proceedings legalese insurance; k) the law applicable to the insurance contract; l) the existence of the Guarantee Fund. In situations of life insurance and / or accident and sickness insurance and / or health insurance information ranging from general insurance which insurers must provide customers before concluding a life insurance contract are: a) definition of each insured event, the insurance indemnity if the insured event of each benefit and optional clauses / further; b) insurance exclusions; c) the start and the termination of contract; d) the modalities of execution, suspension or termination of contract; e) how are paid first, duration and terms of payment of insurance premiums; f) the manner and terms of payment of the insurance indemnities, the redemption amounts and insured amounts; g) information on the premiums for each benefit, both main and supplementary benefits, where appropriate; h) information about the grace period; i) the calculation and distribution of bonuses and the amounts of profit sharing where appropriate; j) an indication of the total redemption value, low level of insurance and the extent to which they are guaranteed for each year of insurance in the insurance period covered by the insurance contract; k) information about situations where the surrender value of the policy is 0; l) information assets, define units that are linked benefits of life insurance and annuities related to investment funds; m) a simulation of the evolution of the contractor carrying amount and the total redemption value at the end of each insurance year in the period covered by the insurance contract for life insurance and annuities related to investment funds; This simulation will be maintaining constant drive value throughout the contract of insurance; n) procedures for the settlement of any disputes resulting from the execution of the insurance contract or information about how to resolve amicably the claims made by policyholders or beneficiaries covered by the insurance contracts, where appropriate, they constitute a restriction on the right of the client to recourse to legal proceedings; o) general information on the deductions in the tax laws that apply to insurance contracts; p) the law applicable to the insurance contract; q) the existence of the Guarantee Fund. During the course of an insurance insurer are required by Order CSA 7 no. 1/2012 insured or the policyholder to provide all relevant information for the risk insured: - Any change of name of the insurer, its legal form, address of registered office and, where applicable, the name of the branch or agency which concluded the contract; - If the conditions in the insurance contract or amending the law applicable to it; - On each anniversary of the contract of insurance, information on the situation in the amounts of bonuses and profit sharing. Legislation insurance does not exclude obligations to pay insurance intermediary 8 clients information on: A. insurance brokers, brokerage assistants, brokers in insurance / reinsurance: a) that are, where applicable, registered or licensed by the Insurance Supervisory Commission in accordance with the norms issued pursuant to Law no. 32/2000, as amended and supplemented, and the registration number of insurance brokers Registry, Registry personnel of insurance and / or reinsurance brokers or brokerage assistants Journal and the means to verify this information; b) name and registered office, as applicable; c) that in accordance with art. 35 para. (10) of Law no. 32/2000, as amended and supplemented, provided empowerment received from insurers are entitled to collect 7 Insurance supervisory authority was reorganized in ASF 8 Insurance intermediaries are legal and natural persons as defined under Art. C 2 'Definitions for intermediates "of Law no. 32/2000, as amended and supplemented, insurance brokers, brokerage assistants, brokers in insurance / reinsurance, insurance agencies and insurance agencies subagenţii subordinates. 25

7 Sibiu Alma Mater University Journals. Series A. Economic Sciences Volume 8, no. 2/ 2015 premiums, pay compensation on their behalf in the currency specified in the insurance contract, as appropriate, legal provisions in force, and to issue insurance documents on behalf of the insurer; d) whether information about the proposed insurance contract customer are provided under the study conditions of a sufficiently large number of insurance contracts available on the market, enabling him to make a recommendation based and professional, consistent with the requirements of customers in the mandate brokerage; e) procedures for the amicable settlement of any disputes between customers and insurance brokers, brokerage assistants, brokers in insurance/ reinsurance; B. Insurers and captive insurance agents: a) that may, if necessary, to conduct business as insurance agents and captive insurance agents, as they have a valid written authorization, from an insurer or a contract agent, to act on his behalf; b) the registration number of the Register of insurance agents, insurance agents and ways to verify this information and unique code; c) the classes of insurance brokering insurance 9 contracts; d) the name insurers who are authorized to arrange each class of insurance by staff contract; e) any participation or any shareholding interest, as applicable, that an insurance company or a parent company of a particular insurance company holds the voting rights or capital insurance agent in person; f) procedures for the amicable settlement of any disputes between clients and insurance agents, insurance agents, subagent and subordinates; C. Insurance intermediaries must inform customers of their right to request further information on the insurance contract; D. Other elements that must be included in the insurance contract. The insurance contract 9 In accordance with art. 34 para. (8) of Law no. 32/2000, as amended and supplemented will include, besides the elements provided in art. 10 of Law no. 136/1995 on insurance and reinsurance in Romania, with subsequent amendments and the following items: a) the manner and terms of payment of the insurance indemnities, the redemption amounts and insured amounts; b) insurance exclusions; c) information on any rights the parties may have to terminate the contract early or unilaterally, including any penalties imposed by the contract in such cases; d) information about situations where the surrender value of the policy is "0". Conclusions Insurance protects investments, employees and profit, offsetting effects of financial risks occurrence generates damage. Provides support for environmental restoration accidentally destroyed by direct or indirect economic activities. Sustainable development cannot be achieved in the long term than the introduction of commercial insurance in the equation between environmental protections - economic development - social development and a performance guarantee to speak of respect for the present and future societies. Ensure all values are suitable or commercial property, including effects on third parties or the environment arising from human activities or economic inactivity. A cheap insurance is not always an economical solution. Entrepreneurs should read carefully or with a consultant, insurance contract conditions. Entrepreneurs and/ or their servants have to follow the existence of mandatory minimum information provided by insurers and insurance intermediaries in the supply of insurance in the insurance contract. Insurance must be completed in all companies and every person who has employed professional. References Cistelecan L., R. Cistelecan, N.M. Udrea, D.M. Bogdan, 2013, Treaty of Commercial Insurance, Publishing Romanian Academy, Bucharest, ISBN Cristina C. 2001, "International Insurance - Architecture and issues into the Third Millennium", Ed Intelcredo, Deva, ISBN

8 Decebal - Manole BOGDAN - Sustainable development between insurance and entrepreneurship Irina S., 2009, "Insurance Law", CH-BECK Publishing House, Bucharest, ISBN Julian V., Florian B., "Insurance and Reinsurance", Expert Publishing House, Bucharest, ISBN CR Lazarus Cistelecan, commercial insurance, publishing house "Petru Maior" Targu Mures, 1997 ISBN X. ***Insurance and reinsurance in Romania Law no.136 / 1995, published in the Official Gazette no. 303 of December 30, ***Law firms and insurance supervision no.32 published in the Official Gazette no.148, Part I of 10 April 2000 as amended late. 27