RUSSIA: New regulation on MTPL came into force, allowing to reduce tariffs for careful car owners

8 September 2020 — Marina MAGNAVAL
On September 5, 2020, a new regulation of the Bank of Russia came into force, defining the procedure for applying new MTPL tariffs and allowing insurers to apply tariff factors that characterize likelihood of an insured event, The Russian Association of Motor Insurers (RAMI) informed.

Application of the new tariff calculation system will give insurers the tools to reduce MTPL prices for careful drivers and increase competition, according to Igor YURGENS, the President of RAMI. At the same time, the base tariff, as before, will be determined within the established tariff corridor.

Before the amendments came into force, insurers, when determining the base tariff rate within the tariff corridor, could only consider categories and purposes of vehicles in relation to their territories. Now they will be able to use tariff factors that individualize prices for each car owner.

Igor YURGENS, the President of RAMI, said:

"Which tariff factors to use - this will be decided by each insurance company based on its accumulated statistics. Probably, many insurers will use their Motor Hull experience, which shows that loss ratios of car owners may be associated, for example, with their credit history, or whether he/she prefers a sports car or a "family' car, etc. That being said, insurance companies will start a serious struggle for accident-free car owners, as it has been happening for a long time in Motor Hull."

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