| Zaiets O.M., Candidate of Law, Chief Research Fellow in the field of jurisprudence at IPE LLC, https://orcid.org/0000-0002-4426-5241 Economics and Law. 2021. No. 1. P.10-19. |
Annotation.
Topicality. In almost all historical eras there have been attempts to reduce the misery caused by armed conflicts. The armed aggression of the Russian Federation against Ukraine, which began with the occupation of Crimea in February-March 2014, the hybrid war in Donbas since April 2014, and the open full-scale armed invasion on February 24, 2022, is not an exception, and is accompanied by an unprecedented destruction of the Ukrainian civilian population, including children, the destruction of Ukrainian cities, cultural and spiritual values forces the leadership of the country and ordinary people, in search of international protection, justice and punishment of the aggressor, to appeal to the norms of international law, regarding the search for compensation mechanisms for damages caused by using the possibilities of the insurance institute.
Acquaintance with the foreign experience of conducting international insurance business will allow to form the prerequisites for the implementation of Ukraine’s strategic course for integration into the global economic space. After all, the functioning of the insurance market of Ukraine in conditions of strengthening globalization and integration processes, trends of capital concentration in the financial sector of the economy determines the need to improve the methodical support of the functioning of the risk management system in insurance companies, taking into account world experience and military aggression from the Russian Federation.
Aim and tasks. The purpose of this article is to promote the formation of fundamental knowledge about the specifics of conducting international insurance business and the functioning of the institution of military risk insurance, its problems and current trends, the organisational, legal, financial and economic foundations of its activities, and the specifics of implementing international types of insurance and reinsurance for financing military risks, international experience in the use of financial instruments, forms of interaction between the insurance market and the capital market, and the fundamentals of the activities of banking and insurance groups as institutions of the international insurance market.
Research results. The implementation of international law covers various areas of activity, ranging from the adoption of legislative measures to practical issues, such as the introduction of certain methods and means of compensation for damages caused.
The Institute of War Risks Insurance has its origins in legislation dating back to World War I, when an agency was created to supplement the inadequate war risk insurance then available on the commercial insurance market. This agency, the Bureau of War Risks Insurance, had the authority to insure American ships, freight, cargo and crew against losses or damages caused by the risks of war. The agency was later abolished, and its functions relating to merchant shipping were taken over by the Maritime Administration, Department of Commerce.
Risk is a concept that is universal in everyday use. It is simply an expression of the potential for a particular action to result in a particular loss. Risk is a combination of the probability of an event and its consequences. Awareness of the consequences of various actions or events is clearly necessary for making informed decisions about public safety. If the core of a nuclear reactor melts down, there will be a massive release of radioactivity. Even if it were contained at the nuclear power plant, the public trauma would put pressure on the nuclear industry to shut down, as happened in Japan. This key paradigm, which has been highlighted in the literature on risk for over half a century, shows that awareness of the probability of an adverse event must also be important for decision-makers.
War risk insurance is an insurance policy that provides financial protection to the insured against losses resulting from events such as invasion, insurrection, riots, strikes, revolutions, military coups, and terrorism.
The capabilities of insurance companies are also limited in the context of compensation for losses from hostilities. The Government of Ukraine should work on this complex issue. Carry out work on assessing the losses that have already been caused or may be caused in the future in order to have grounds to hold the aggressor accountable. The Russian Federation must pay. The mechanism also requires attracting international assistance to create a Fund from which compensation will be paid. The creation of such a Fund guarantees coverage of losses of vehicles – cars, planes, barges, etc.
Conclusions. The Institute of War Risk Insurance study should focus on the following conclusions: War risk insurance is the coverage of losses arising from events such as war, invasion, insurrection, riot, strike, and terrorism; War risk insurance is offered as a separate policy because it is excluded from standard insurance policies due to high risks; Companies operating in high-risk countries are good candidates for war risk insurance; War risk insurance is often excluded from standard policies due to the inability of insurance companies to accurately predict losses and, therefore, charge appropriate premiums.
