20 Jul 2023 09:03

Russian lawmakers table bill to cancel charter capital increase for insurers set for 2024

MOSCOW. July 20 (Interfax) - A group of State Duma members and senators has submitted a bill to the lower house of parliament that would make Russia's current charter capital requirements for insurance companies permanent and cancel their planned increase as of January 1, 2024.

The bill (No. 405773-8), which has been posted in parliament's electronic database, was authored by a group of Duma members led by Duma Finance Market Committee Chairman Anatoly Aksakov and a group of senators led by Federation Council Deputy Speaker Nikolai Zhuravlev.

Under current legislation (law 251-FZ to amend the federal law governing insurance organizations in Russia), the minimum charter capital for insurers who provide property insurance and coverage for business risks, as well as personal insurance is supposed to go up to 300 million rubles as of January 1, 2024 from the current 240 million rubles. The new bill submitted by lawmakers would leave the capital requirement for this type of insurance at 240 million rubles permanently.

The minimum charter capital for life insurers is supposed to increase to 450 million rubles from current 380 million rubles as of January 1, 2024 and the minimum capital for reinsurers is set to go up to 600 million rubles from 560 million rubles. The new bill would permanently leave these figures at 380 million rubles and 560 million rubles, respectively.

The minimum charter capital requirement for providers of health insurers is remaining unchanged at 120 million rubles.

"Requirements for the size of charter capital essentially serve only as a condition for new insurance organizations' access to the market. For these purposes the requirements for size of charter capital set by the federal law of July 29, 2018, No. 251-FZ "On amendments to the Law of the Russian Federation 'On insurance organizations in the Russian Federation,'" are an adequate market condition and do not require the increase planned for January 1, 2024," a memo attached to the bill said.

The bill also eliminates consideration of subordinated loans when calculating requirements for the financial stability of insurers.