Bank of Russia aims to strengthen insurance supervision and regulations and advocates for the national reinsurer's establishment

28 April 2016 — Daniela GHETU
A stronger legislation for the insurance industry, aligned with the requirements that need to be fulfilled by banks and NPFs, as well as the establishment of a national reinsurer are the priorities on the Russia Central Bank's agenda, as revealed by Bank of Russia Governor Elvira NABIULLINA in the speech she recently gave at the RF Ministry of Finance expanded board meeting.

"First of all, this is the draft law regarding goodwill definition requirements to cover the management and owners of non-credit financial institutions. There are such requirements with regard to banks, and they may need improvement; but we want cross-sectoral regulation applied here. This is undifferentiated tough suppression of comebacks to financial markets as may be attempted by individuals with tarnished reputations, regardless of the place they have committed a violation, be that banks, insurance companies, pension funds or other financial institutions.

Although this project is of high magnitude and complicated, my hope is, our efforts will make sure it is passed within this legislative session.

The second area of our cooperation is the project of stronger requirements to be developed for the insurance sector. Insurers, as key players in the financial market, should, in our view, meet the same requirements as those applied for NPFs or banks. And this project addresses these challenges.

The third one is related to insurer bankruptcy procedure optimization and delegation of bankruptcy administration powers to the Deposit Insurance Agency. We consider this project as part of a large effort to improve bankruptcy procedures and financial institution resolution processes.

In the nearest time, there will be several more projects on the Duma's agenda, and these concern various aspects of supervision in the financial market. [...]

Another important issue is about supervision improvements. It is important that problems be identified early on. We all agree with you that problems must be identified and stopped as soon as possible. But this will be difficult without professional judgment, and so we look to the Ministry of Finance to support the Central Bank's initiative.

And, in conclusion, I would like to highlight a draft law the Central Bank considers important for the effort to complete the creation of key financial market components and financial market infrastructure. Last year, a lot of our efforts went into the development of a national payment card system law. This is the time, in our opinion, when the Russian financial market is in need of a reinsurance Institute, a National Reinsurance Company. We have been discussing this project long enough, with some disagreement, but, in my opinion, we need to go ahead and launch this component, whereas we would thereby secure self-sufficiency and sustainability in the financial market," said . NABIULLINA.

The full speech was published of the Central Bank's website on April 20th.

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