The Insurance Business

In this chapter, the fundamental aspects of insurance business are explored. The main rules governing the authorisation and carrying on of insurance business are described. The aspects concerning the legal form (corporate form, European company etc.) are deepened. The authorisation procedure and related activities (scheme of operations, single authorisation, cross-border business, registry etc.) are explained. The reader can understand the classification of risks according to classes of insurance underlying the lines of business (LoB), as required by the European legislation. Then, the classes of risks (for life and non-life) and the related classification are illustrated in detail. The following paragraphs illustrate the three fundamental pillars to understand the functioning of the insurance industry: solvency margin, technical reserves and investments in accordance with the directive in force. The legal discipline of equity investments, of an insurance group, and financial conglomerates is described. At the end, extraordinary events (mergers and spin-off) and the crisis management of an insurance undertaking are explained.