Modern risk management is carried out using various tools including evaluation and control tools, use of consultants and special software, drafting of enforcement programs (COMPLIANCE PROGRAMS) and more.

One of the most popular and available tools for managing risks and minimizing them is the use of liability insurance policies (contracts) and other types of insurance contracts. Insurance as a tool for risk and crisis management has many advantages, the essential of which is the possibility of "transferring the risk" in an intelligent way to a third party (the insurer) at an attractive economic price compared to other alternatives (as far as they exist).

The fact that an insurance contract is an available and cheap tool (usually) for risk and crisis management has not gone unnoticed by the Israeli legislator (both in the main legislation and in secondary legislation), which is reflected in various laws and regulations in which the insurance instrument is used as a prerequisite for obtaining a license or approval activity in a certain field. At the same time, it is surprising to see that in some cases, the use of the insurance tool and its requirement as a prerequisite for obtaining various approvals and licenses or as a basic condition for carrying out a certain economic or social activity, specific insurance is required without the legislator examining the relevant insurance market or going to the root of the risk he requested To insure and whether there is an insurance response to the insurance requirement that was raised, prior to the determination of the insurance requirement in the provisions of the law.

The following examples illustrate cases in which an insurance requirement was raised in the past in secondary legislation, apparently, without first examining the validity of the insurance and whether there are insurance solutions available at a reasonable cost to insure the relevant risk: Child Adoption Regulations (Recognition of the Association for Intercountry Adoption), 1998 (hereinafter: "Adoption Regulations"), were established as part of the legal provisions for the implementation of the provisions of the Child Adoption Law, 1981-1981. The adoption regulations were established following serious failures that were discovered in a number of associations that engaged in the adoption of children from abroad and did not fulfill their obligations to adoptive parents both on the level of the adoption itself and on the financial level, after collecting considerable amounts of money from them, without the adoption process having matured. Words are not good enough to describe the heartbreak of couples and childless individuals harmed in the process.

As part of the solution to reduce the aforementioned exposure, the regulations stipulate that international adoption will only be carried out through a recognized association and for the purpose of recognizing an association as recognized for the purpose of international adoption, the following insurance requirement was established in the adoption regulations: "Insurance in case the adoption in the foreign country does not come to fruition due to circumstances beyond the control of the association and the applicants." In the first years after the publication of the adoption regulations, not a single association that sought to be recognized as a "recognized association" met the aforementioned insurance requirement, which caused many delays in potential adoption processes. It turns out that the insurance that meets the requirements of the adoption regulations as mentioned above was not available and due to the lack of activity On the subject, no insurance markets were found that agreed to carry out such insurance, both due to its complexity and due to the fact that the risks included in the above description are complex risks that include, among other things, political risks and other risks, some of which cannot be insured.

When the Ministry of Justice referred the above issue to the HM's examination, it became clear that prior to the installation of the regulations, the sub-legislator did not examine and was not aware of the absence of an insurance solution available for the insurance that is required as mandatory insurance in the adoption regulations. Following the consultation, the regulations were amended and today the required insurance, as part of the conditions for receiving recognition as a "recognized association" for the purposes of the adoption law, is professional liability insurance (which covers exposure to risks that depend on the association and the applicants - negligence), while for the purpose of hedging the financial risk, the association is required to provide a bank guarantee in the prescribed amounts in the regulations.

Another example existed in the Income Tax Regulations (Rules for Approval and Management of Provident Funds), 1964-5544 (hereinafter: "Income Tax Regulations"). The regulations previously stated that an institutional body must take out liability insurance for directors and officers. No amount of insurance was set and apparently Taking out insurance in any amount, and even within the limits of liability of NIS 5, would comply with the requirements of the regulations regarding this insurance. Only after the installation of the regulation requiring the preparation of liability insurance for officials and after an audit by the Chamber of Commerce, the regulation requiring an institutional body to prepare insurance was changed. As part of a consultation with the Ministry of Finance, the risks that the Ministry of Finance wanted to hedge within the framework of the regulation were examined. It was found that the Ministry of Finance wanted to protect first of all the risk exposure of Colleagues in the provident funds (as opposed to the personal exposure to claims of officers in the provident funds) and therefore, following the consultation, the regulation was changed and it was determined that the mandatory insurance that must be taken out by a managing company of provident funds is professional liability insurance and that liability insurance for directors and officers will be authority insurance only.

There are other examples (such as: within the stock exchange rules and the insurance requirements required of a stock exchange member who is not a bank, the insurance requirements of companies applying to obtain a license to provide credit data services, etc.), of cases where the insurance aspects of the legislation were examined by the sub-legislator only in retrospect and some were amended accordingly, which could have been done in advance and thus save the relevant parties, including the public, unnecessary time and expenses and sometimes even prevent unnecessary embarrassment from the deputy legislator in cases where the examination of the insurance requirements in the legislation was examined in depth only after the act of legislation.

It can be hoped that any future economic and social legislation, and in particular secondary legislation that will implement the provisions of primary legislation, will be done while examining insurance solutions for hedging risks and reducing them in legislation and presenting the relevant issues and existing insurance solutions to the secondary legislator and the main legislator, with the help of expert insurance consultants, already in the preliminary stages of the legislation and not retrospectively as which occurred in some of the cases reviewed above