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Posted in Regulatory and legislative updates, Russia

The Russian Insurance Regulator is contemplating a new supervision initiative

Just after assuming powers as the new Russian Insurance Regulator late 2013 and completing the internal re-organisation of the insurance department in March 2013, the Russian Central Bank is contemplating the initiative of sending its supervisors (so called curators) to the Russian insurance companies.

The precise mechanics has not yet set clear but it is expected that the first top hundred of Russian insurance companies will be affected by this new supervisory initiative. The proposition for top-20 companies is to have an individual supervisor (alternatively top-10 – one supervisor per company, the rest top-20 – one supervisor per two companies) and the rest of top-100 will have one supervisor per four companies. Views of the Russian insurers on the new initiative split, however, the balance tilts to a more positive view on this matter, which may unify the supervisory practice.

The idea of such an operative way of supervision is not new to the practice of the Central Bank. It has been sending its supervisors (curators) to the Russian banks for years before this initiative and now it seems to expand this practice to the newly acquired area of regulatory responsibility.

However, in respect of banking supervisors the scheme has steady legal footing both on the statutory level and on the level of regulation. This is something that Russian insurance law presently lacks at any level. This caused the expert committee of the State Duma to file a clarification request to the Central Bank on the proposed scheme. The response is not yet made available to the public.