Private insurance as a mean for fighting corruption

Abstract

Austrian companies providing financial services play important role in economic recovery program-* mes in southeast Europe.

Austria acts as the major investor in many regions and, therefore, Balkan countries’ membership in the EU is so important for Austria.

However, there are very important problems of adjustment on the road to the EU, as it is corruption issue.

Harmful effects of corruption became obvious in many ways in past decades. Corruption put market principles beyond law preventing real progress of the developing countries and candidate-countries for membership in the EU. Corruption is especially devastating for those countries, which are lowest capable of affording inefficient use of their limited financial resources. Generally, corruption leads to volume decrease or performance quality worsening of the most organizations and outgo extension, i.e. contributions for those enterprises. Danger of corruption is especially large when there is a financially essential blend between private companies and public authorities.

During social scheme restructure in Europe, private insurance converts into such financially essential blend, because larger business volume in the field of pension and medical care becomes responsibility of the private insurance companies. Great social importance of insurance lies in the fact that it protects insured against economic consequences of damage. Such circumstance facilitates economic planning and enables room for individual actions, which otherwise won’t be possible. Social importance of the private insurance is by far the largest, because it is insurance against life risks, n’amely illness, care and nursery or death. In such žinsurance welfare’ lies danger of abuse.

Corruption in insurance, therefore, has especially uncomfortable consequences. For example, when false statistics or expert reports diminish present rišk, medical and pension insurance shall, because of insufficient or non-existing reserves, find themselves in unfavourable financial situation.

Corruption in medical sector leads not only to high prices, but even worse, it aggravates healing of the poor and those, who are not prepared to pay a bribe in order to have access to medical service.

Corruption structure in the medical sector of the Southeast Europe may not only be suppressed with new laws and more stringent prosecution. Earnings in the medical sector are very frequently so low that illegal’enrichment represents the only solution.

Private medical insurance may enable employees in the medical sector to legally earn high income. Higher premiums thousands of private patients pay for their additional insurance, treatment by well-regarded doctors, better service and accommodation, create additional income to hospitals and raise income level of the employees at those institutions. Private insurance creates culture by the constant quality control, which puts corruption in the medical sector on the black list and reduces it to a certain extent.

Fight against corruption is a crucial society’s task. Transparency International compiled so called ‘corruption check list’ for that purpose. It contains valuable information on corruption, how to investigate corruption and information on what to undertake in certain cases

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