RUSSIA: Federation Council approved new requirements to charter capital of insurers

According to new requirements approved by the Russian Federation council, the minimal size of insurers' charter capital will strongly increase in a staged process that will end by 2022, the ASN portal reports.

Thus, non-life insurers' charter capital will be increased from RUB 120 million* to RUB 300 million, while capital requirements for life insurers will increase from RUB 240 million to RUB 450 million, for reinsurers - from RUB 480 million to RUB 600 million.

The increase will be staged. General insurers until January 1, 2020 should increase charter capital to RUB 180 million, until January 1, 2021 - to RUB 240 million and until January 1, 2022 - to RUB 300 million. Life insurers' charter capital by January 1, 2020 should amount to RUB 310 million, by January 1, 2021 - to RUB 380 million and by January 1, 2022 - to RUB 450 million. Charter capital of reinsurers by January 1, 2020 should amount to RUB 520 million, by January 1, 2021 - to RUB 560 million and by January 1, 2022 - not less than RUB 600 million.

Those requirements will not affect big insurers, charter capital of which amounts to RUB several billions. For example, charter capital of SOGAZ (the market leader) amounts to RUB 25 billion. As for the insurers, providing compulsory health insurance, their minimal charter capital should amount to RUB 120 million and this rule will come into force after 1 year since official publication of the new law.

Besides, as informed ASN, the law established the definition of a business-plan for insurers, which should provide a development strategy of an insurer for next two years' period, as well as assessment criteria for a business-plan and specifies the procedure of insurers' licensing.

*EUR 1 = RUB 73.5632 (as of 08.08.2018 for approximate calculation)

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