New Rules in Russia For Overseas Insurers

The latest from TASS;

Foreign insurers from member-states of the World Trade Organization (WTO) will be able to create branches and run the insurance business in Russia. The relevant law came into force yesterday.

According to the law, foreign insurers will be able to deal with third party liability insurance, voluntary insurance kinds and reinsurance through their branches. To create branches, such market players should have assets worth at least $5 bln and the accreditation with the Bank of Russia. Foreign insurance companies should at the same time form a security deposit not lower than the minimal value determined for Russian insurers. The law stipulates that the company can be denied opening a branch if the share of foreigners on the Russian insurance market will be over 50%.

The restriction to make individual kinds of contracts for foreign insurers is similar to the ban in respect of subsidiaries of foreign insurers prescribed in current laws. The Bank of Russia is provided with the authority to supervise operations of foreign insurers in Russia.

Certain norms of the law will be effective since 2024. A foreign insurer is obliged by January 1, 2024 to quarterly furnish a statement of the special bank account to the Central Bank, evidencing that the security deposit amount of its branch meets established requirements.

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