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The dictionary of terms of insurance
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An intermediary between the insurer and the insurant (reinsurer and reinsurant) in the execution of insurance (reinsurance) contracts whose intermediary services are subject to the payment of a broker fee. A broker should have the expertise in legislation and insurance practices. It is believed that as a professional, a broker has to know all and everything about insurance and a broker’s knowledge shall be used to ensure best terms and conditions of insurance and insurance premiums for the principal. A broker is the insurant’s (reinsurant’s) agent, not of the insurer/reinsurer. The broker is not legally bound with any liability to the insurant (reinsurant). However, this does not mean there could be no moral liability. If a broker commits negligence in the performance of its functions which results in damages caused to the insurant (reinsurant), the latter is entitled to demand the settlement of the damages so incurred.


A discount on the size of the insurance premium in absolute numbers, percent or PM offered by the insurer for the execution of an insurance contract on exceptionally benefiting terms. The size of the bonus is entered in the insurance policy. In the United States insurance practice, the bonus is frequently addressed as rebate.

Bonus Malus System (BMS)

This is a system that adjusts the premium paid by a customer according to his individual claim history. It foresees the use of a multiplier or a reduction factor in the calculation of the price compulsory civil liability motor-vehicle insurance policy value with consideration of a client’s claim history for the pervious period. In other words, an insurant who has reported no vehicle accidents (M.V.A.) for the previous period, and such clients form the majority of all policy holders, is offered a 5% discount. In the event of an MVA where the client is the guilty party, the insurance policy will appreciate by 55%. In the event of two incidents where the client is the guilty party, the price of the policy will boost 2.45 times. The BMS is in use in many countries. Insurers are willing to encourage accident-free and safely driving customers. Unfortunately, Russia’s bonus malus system links the customer to a vehicle, which means that in the event of purchase of a new vehicle the bonus is set to nil. Our experts believe the situation needs to be revisited. The BMS should be applicable within one insurance company, and this will make it operable regardless of whether the client changes the vehicle or continues to use the previous one.


The list of risks accepted for insurance or subject to reinsurance. The bordereau is issued by the assignor (reinsured) to the reinsurer within the period stipulated in the reinsurance contract.