Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their

risks and protect themselves from very large losses. The reinsurance market is dominated by a few very large companies, with huge reserves.  The volume of the societys financial resources depends, in principle, by two factors: 1. the size of gross domestic product (GDP); 2. The possibility of obtaining external financial resources (loans, donations, etc.). Financial resources of the society or nation include public financial resources. At the same time public financial resources include: financial resources of the central state administration; resources of the local state administration; resources of public enterprise; resources of state social security.  Insurers makes money in two ways. Through underwriting(the process through which insurers select what risks to insure and decide how much premium to charge for accepting those risks and by investing the premiums they have collected from insureds.) and investment profits  The obligatory insurance is defined by the law, according to which the underwriter must insure the corresponding objects, and the insurer must take necessary insurance payments. The law usually stipulates all necessary terms and the order of carrying out the given kind of insurance.  Treasury resources consisting of short-term loans (up to one year) state contracts through the issuance of treasury bills. Treasury resources have temporary and refundable character, because the withdrawal from circulation of treasury bills to is equal with the repayment of amounts borrowed by state at the short-term public treasury.  Central state administration resources include: a) taxes and fees; b) non- fiscal revenues; c) loans; d) other resource.  Tax rate establishment When introducing a tax, it is necessary to identify the taxpayer of the tax , the source to be levied (the cost or the profit) and the exact taxation object is determined together with the calculation method of the tax. The tax rate depends on the sum that needs to be collected and the number payers. Next, the tax collection method is established. The taxation basis and the method of its determination, as well as the tax rates and payment deadlines are determined for each tax or charge in the law on the given tax or charge. Tax payment is the obligation of each taxpayer. The financial relations between the state and the taxpayer are reflected in the tax obligation. The tax obligation is the condition that obligates

the taxpayer to pay the given tax or charge and grants the taxation authorities the right to demand the fulfilment of this obligation by the taxpayer. The fulfilment of the tax obligation is achieved through paying the established tax or charge amount within the stipulated deadline. The fulfilment of the tax obligation is mandatory and is executed irrespective of other obligations that the taxpayer may be subject to. This obligation covers the entire wealth of the taxpayer. Full or partial tax evasion constitutes sufficient grounds for applying a punishment to the taxpayer, which usually takes the form of a fine. Modern Taxation Principles 1. The rational combination of direct and indirect taxes, which implies the utilization of various types of taxes, taking into consideration both the wealth and the income of the taxpayer. 2. The universalization of taxation which implies equivalent efficiency requirements to all payers and an equivalent approach to the deduction of the tax amount irrespective of the income source, type of activity, or economic sector. 3. One-time taxation implies that one object can only be taxed once through one tax type for a specific period of time indicated in the law. 4. The scientific approach for the determination of the exact tax rate, which implies setting the deduction rate at a level that would allow the subject to have an income necessary for normal development. 5. Stability, or the endurance of taxation for a long period of time and the simplicity of deducting the payment. Tax rates should be determined by law and should not be revised frequently. 6. Differentiation of tax rates in accordance to the level of income, which should not develop into an inhibitive progression (i.e. a significant increase in tax rates), nor should it be transformed into an individualization of rates, which contradicts the basic principles of the market. 7. The application of a tax allowances system, which would lead to an actual stimulation of investments into entrepreneurship activities and would, at the same time, comply with the principle of social justice, including the insurance of a minimum living standard of the citizens.  Principles of obligatory insurance: 1) The obligatory insurance is defined by the law, according to which the underwriter must insure the corresponding objects, and the insurer must take necessary insurance payments. 2) For the overall obligatory insurance indicated by the law, the insurance agencies carry out annual registration of the insured objects, make payments and charge premiums in the stipulated terms. 3) Automatic insurance covering of the objects is indicated by the law. 4) The effect of the obligatory insurance does not depend on the premiums. 5) Permanent obligatory insurance works during the whole period, within which the insurer uses the insured property.  Principles of voluntary insurance:

1) Voluntary insurance is effective under the law about insurance and under voluntary authority. 2) Voluntary participation in insurance is characteristic only for the insurers. 3) Selective voluntary insurance is due to the fact that not all insurers wish to participate in it. 4) Voluntary insurance is limited. 5) Voluntary insurance is effective only after paying the insurance premium.  Obligations of the State Insurance Supervision: 1) 2) 3) 4) 5) 6) 7) 8) establishing the unique State Insurance Registry; auditing in insurance companies; control over the insurance rates; control over the playability of underwriters; establishing the rules about forming and placing insurance reserve funds; ensuring the publicity of insurance activities; checking the authenticity of the presented reports; providing official information about underwriters registration.