Improvement of financial settlement rules in reinsurance

Abstract

Economically substantiated insurance rates, insurance reserves, reinsurance, own funds and a reinsurance system ensure the financial sustainability of the insurance company. With the development of the insurance market in Georgia, the reinsurance practice is developing. It is noteworthy that large insurance companies in Georgia prefer to cooperate with well-known foreign reinsurers, which, in their opinion, simplifies reinsurance risk management. The need for reinsurance is driven by the high degree of financial risk inherent in a market economy, which is directly dependent not only on natural disasters but also on the economic crisis, inflation, political situation and other socio-economic anomalies. The insurer shall be entitled to cover the risk through reinsurance to another insurer (reinsurer) for the whole or partial fulfillment of its obligations to the insurer.