Insurance or the insurance or guarantee system is a means of facing the risks that a person is exposed to in his entity or his money during his life in order to mitigate their impact. The essence of this method is the cooperation that is achieved by the participation of people exposed to the same risk in facing the effects that result from achieving it for each of them, by each of them paying a subscription or a premium, and the amounts collected are collected and then distributed to those who are affected by the disaster. Thus, the effects of the disaster are achieved on those participating in achieving this cooperation. Insurance is a practical reality, and it is one of the best means that enable people to mitigate the effects of disasters, whether these disasters occur due to the person himself, through his negligence or neglect, or by the action of others. It is a means of security that is consistent with the spirit of the modern era in which the requirements of life have increased, the danger of machines has increased, and the risks of development have become clear. The effectiveness of insurance, as a modern means of confronting risks and their effects, was the most prominent reason that led to its prosperity, the diversity of its fields, its development, and its extension to different fields, to insure individuals from every risk they are exposed to, whether in their money or their persons. The effectiveness of insurance also led some countries to impose some types of it to ensure that some categories of the people receive compensation for a specific accident. The insurance system assumes the existence of a legal tool that regulates the relationship between the insurer and the insured, which is the insurance contract. However, insurance is not limited to this aspect. In addition, insurance is a technical process in which insurance companies use technical means to achieve their goals in covering the risks that occur. They use the technical elements necessary to manage insurance operations, such as the rules derived from statistics, the risk clearing system, and the application of the law of abundance, in addition to the rules of financial management. Thus, they can achieve the goal of covering the risks that befall the insured, and at the same time, the insurer - the insurance company - can manage the insurance project in a way that achieves its investment purposes, to make some profit and contribute to achieving the goals of the national economy.
Definition of Insurance
In the language
"Insurance" in the language comes from "Ammana", and security against fear, and it means: the peace of the heart and its reassurance and confidence. It was said: "The origin of security is the peace of mind and the removal of fear, and security, trust and safety are originally sources, and security is sometimes considered a name for the state in which a person is in security, and sometimes a name for what a person is insured against." It is pluralized as insurances.
Jurisprudential Definitions
The jurisprudential definitions of insurance are numerous and differ from one another. This is mainly due to the fact that insurance involves two aspects, the first aspect is legal, and the other is technical. Some jurists focused on the first aspect, highlighting the legal insurance instrument, i.e. the insurance contract, and others focused on the technical aspect of insurance at the expense of its legal aspect. The majority of jurists believe that an accurate definition of insurance must address its legal and technical aspects, otherwise it would be an incomplete definition. The legal aspect of insurance is represented in the relationship between the insurer and the insured, which arises from the insurance contract that binds them. This relationship assumes that there is a risk or accident that is feared to occur to the insured. The latter seeks to insure himself from this risk or accident by contracting with the insurer. This is usually the insurance company. Which is obligated to cover this risk when it occurs, in exchange for a specific premium that the insured is obligated to pay. The technical aspect of insurance goes beyond that individual relationship, and is represented in the technical foundations on which the insurer relies in covering the risk. When the insurer covers the insured risk, he does not accept it as a speculative act, otherwise insurance becomes a gambling or betting process, and would be an illegal contract. Rather, the insurance company contracts with a large number of insured persons and collects a specific premium from each of them, so that when the risk occurs to one of them, the company compensates him with the set of premiums it collects from the rest of the insured persons. When determining the premium that the insured person must pay, the company resorts to the laws of statistics, so that it can be determined accurately in a way that does not expose it to loss or serious risk. This means that the insurance process is based on the cooperation of the insured to face the risks they are exposed to, and the role of the insurer is to manage and organize this cooperation, based on technical foundations and statistical laws. From here, we can notice what is taken from many of the jurisprudential definitions of insurance.
The French jurist Marcel Ferdinand Planiol defined insurance as “a contract whereby a person called the insurer undertakes to compensate another person called the insured for a potential loss that the latter is exposed to, in return for a sum of money, which is the premium that the insured pays to the insurer.” A part of Egyptian jurisprudence defined insurance as “a contract in which the insurer takes on a specific group of risks that the contracting parties fear will occur, and the insured wishes not to bear them alone, in return for a sum called the insurance premium or subscription paid by the insured.” These two definitions and others like them have been criticized for looking at insurance from its legal perspective only as a contract between two persons, the insurer and the insured, and for ignoring the technical aspect of insurance and the technical foundations on which the insurance process is based, and for not highlighting the idea of cooperation between the insured. This definition has also been criticized for not being a comprehensive definition, as it evaluates insurance on the basis that it leads to compensating the insured for a potential loss, as this description only applies to insurance against damages, such as fire or theft insurance. Some jurists wanted to define insurance that combines its technical and legal aspects, so they defined it as: “A technical process carried out by organized bodies whose mission is to collect the largest possible number of similar risks and bear their consequences through offsetting in accordance with statistical laws. This requires that the insured or his designee, when the insured risk occurs, receive financial compensation paid by the insurer in exchange for the former paying the installments agreed upon in the insurance policy.” This definition was criticized for being more concerned with highlighting the technical aspect of the idea of insurance than its legal aspect, and it was also criticized for lacking some brevity. In an attempt to highlight the technical and legal aspects of insurance equally, some French jurists moved to develop a legal definition of insurance followed by a technical definition of this process. These jurists believe that the legal definition of the insurance contract becomes meaningless unless it is complemented by a technical definition of the insurance process. In light of this, the jurist Yvonne Lambert Favre defined insurance as follows:
Legal definition: Insurance is a contract whereby the insured obtains the insurer's commitment to perform a specific amount in the event of a risk occurring, in exchange for a specific amount called the premium or subscription.
Technical definition: Insurance is a process whereby the insurer organizes cooperation between a number of insured persons who are exposed to certain risks, and compensates those among them who are at risk thanks to the joint balance of the premiums he collects from them.
The latter definition was credited with highlighting the two aspects of the insurance process and placing them on the same level of importance, without giving precedence to one over the other. However, he is criticized for separating the two aspects of insurance in two independent definitions in a way that might suggest that it is related to two separate things, although the truth is otherwise. The intention is to define insurance as a single process, even if its aspects are multiple. Therefore, the majority of jurists preferred to define insurance as a single definition that simultaneously encompasses its legal and technical aspects. Therefore, the definition of insurance by the jurist Joseph Heymar prevailed in French jurisprudence, where he defined it as: “A process in which one of the parties, the insured, obtains in return for a premium he pays on the commitment of the other party, the insurer, to perform a specific performance upon the occurrence of the agreed-upon risk from the other party, the insurer, a commitment by virtue of which the latter pays a specific performance, by the insured taking on a group of risks and clearing them according to the laws of statistics.” The majority of jurists in countries with a Latin (French) legal system support this definition.
Legislative Definitions The legislative definition of insurance is the definition set by legislators in a country, so it may differ in form from one country to another, without differing in essence. The difference between the definition of insurance by the Egyptian legislator and the Lebanese legislator, for example, lies in the terminology used. The Lebanese legislator uses the term "guarantee" instead of "insurance", "guarantor" instead of "insurer", and "guaranteed" instead of "insured". It should be noted that the prevailing terminology in Arab laws is the use of insurance, insurer and insured. Examples of legislative definitions:
Definition of Egyptian law: Article 747 of the Egyptian Civil Code defines insurance as: “A contract whereby the insurer undertakes to pay the insured or the beneficiary for whose benefit the insurance was stipulated a sum of money or a fixed income or any other financial compensation in the event of an accident or the occurrence of the risk specified in the contract, in exchange for a premium or any other financial payment made by the insured to the insurer.”
Definition of Lebanese law: Article 950 of the Law of Obligations and Contracts defines a guarantee as: “A contract whereby a person (called the guarantor) undertakes to fulfill certain obligations upon the occurrence of certain emergencies on behalf of the person guaranteed or his property, in exchange for payment of a consideration called the installment or the duty.”
Definition of Syrian law: Article 713 of the Syrian Civil Code defines insurance as: “A contract by which the insurer is obligated in return for an installment or any other financial payment made by the insured to the insurer.”
Definition of Kuwaiti law: Article 773 of the Kuwaiti Civil Code defines insurance as: “A contract whereby the insurer undertakes to pay the insured or beneficiary a sum of money, a salary income, or any other financial compensation in the event of an accident or the occurrence of the risk specified in the contract, in exchange for a cash consideration paid by the insured to the insurer.”
Definition of Jordanian law: Article 920 of the Jordanian Civil Code defines insurance as: “A contract by which the insurer undertakes to pay the insured, or the beneficiary for whose benefit the insurance was stipulated, a sum of money, a fixed income, or any other financial compensation in the event of the occurrence of the insured accident, or the realization of the risk specified in the contract, in exchange for a specific sum or periodic installments paid by the insured to the insurer.”
Definition of Algerian law: Article 619 of the Algerian Civil Code defines insurance as: “A contract by which the insurer is obligated to pay to the insured, or to the beneficiary for whose benefit the insurance was stipulated, a fixed income or any other financial compensation in the event of an accident or the occurrence of the risk specified in the contract, in exchange for a premium or any other financial payment paid by the insured to the insurer.”
Definition of Iranian law: Article 1 of the Iranian Insurance Law defines the insurance system as: “A contract in which one of the two parties undertakes to compensate the losses incurred by the other party or to pay him specific amounts upon the occurrence of events in exchange for the payment of the amount or amounts paid by the other party. The obligor is called the “insurer” and the party to the obligation is called the “insured.” The amount paid by the insured to the insurer is called the “insurance value,” and what is insured is called the “subject of insurance.”
