Russia: The law regarding the Russian National Reinsurance Company was adopted

The law regarding the establishment the Russian National Reinsurance Company has been adopted, on June 21, by the State Duma in the second and third session. The law passed without the amendments proposed previously by the Central Bank, to give the MTPL insurance line to the state reinsurer, in order to avoid interruption or a difficult access of drivers to MTPL policies in a several regions of the country.

The law is providing the obligation of ceding a mandatory 10% quota of the risks to the state reinsurer, which will not apply on the risks of compulsory types of insurance (MTPL, Green Card insurance and life insurance).

Moreover, the state reinsurer will accept in reinsurance the property insurance risks from emergencies situation and all sanctions risks.

It is important to note that the state reinsurance company will be established as a joint stock company and 100% of the shares will be owned by the Central Bank of Russia, with the further possibility to sell a part of the shares.

Thus, the obligations of ceding of risks by the re/insurance companies to the state reinsurer will start sixty days after the date of issue of license to the National State Reinsurance Company, but not earlier than January 1st, 2017.

It is expected that the state reinsurance company's capital will be more than RUB 70 billion.

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