Russia Insurance Information

CIA link to demographic/economic data on Russia

General Russia Insurance Information

Special Report: Russian Insurance Market 2009

• Compulsory Insurance:
  Third Party Automobile Liability (foreign registered vehicles);
  Medical (3.6% of payroll to Medical Insurance Fund);
  Pension: (28% of payroll to Pension Fund);
  Social (5.4% of payroll to Social Security Fund);
  Fire and Fire Liability (Law "On fire safety", article 28--mechanism is not developed yet);
  and Accident Insurance (passengers, soldiers, policemen, etc.)
• Non-Admitted Insurance:
  Prohibited. Prohibited (Clause 6-1, Clause 15). The share of foreign capital in Russian insurance company cannot exceed 49%.
• Policy Wordings & Rates / Tariffs Controlled:
  Terms, conditions, rates are set by each insurer.
• Policy Language:
  Russian and English
• Types of Insurance Restricted to Government Institutions:
• Policy Currency:
  Russian ruble (RUR)
• Currency Restrictions / Exchange Controls:
  If local company, premiums must be paid in Roubles.
• Policy Period:
• Cancellation Provisions:
  Consult policy – each company different. Law "On insurance" Clause 23-3. Advance written notice by either party at least 30 days prior to intended cancellation date, if the parties do not agree something else. Unless otherwise stated in policy wording, the contract is not valid until premium is paid.
• Premium Taxes, etc. paid by Insured:
  As of January, 1996, companies in Russia can deduct insurance premiums as a business expense for tax purposes. From the 1st of January, 1997, up to 1% of turnover (sales) can be deducted for insurance. Insurance premiums can only be paid from the profits, i.e. 34% profit tax should be paid.
• Insurance Companies:
• Brokers:
• Brokerage Commissions:
• Broker of Record Letters:
  Not required by law.
• Reinsurance:
  Usual (local and abroad). There are no restrictions. Foreign reinsurer/broker must provide Russian insurance company with special form signed by tax authorities of the Reinsurer's country of domicile to avoid dual taxation. Otherwise ceding company in Russia should pay 2.5% tax on the reinsurance premium.
• Local Natural Hazards:
  Storm, flood, lightning and EQ are main natural hazards.
• Other Information:

Property Insurance

• Fire:
  Both Named Perils and All Risks forms are available.
• All Risk:
  Construction risks usually insured on an ‘all risks’ basis.
• Coinsurance:
  Not very common.
• Blanket Insurance:
• Business Interruption:
  Normally BI is an addition to Property policy and can not be purchased separately and typically covers same perils. Replacement Cost:
• Discount for fire protection equipment / systems: Available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Such coverages are normally arranged under the Property policy. Pressure vessels must be inspected periodically by special organizations.

General / Public Liability

• Comments:
  Liability insurance is available but rarely purchased due to an imperfect legal system.

Automobile / Motor

• Comments:
  Third Party Automobile Liability (foreign registered vehicles). Local vehicles rarely insured. Casco, Third Party Liability and Passengers/Driver Accident insurances. Insured can choose all or one part of the policy. Some companies can offer legal defense costs. Coverage included within the policy limit.

Workers’ Compensation

• Comments:
  Part of the Government Social Security Scheme. Employer’s Liability also part of the Scheme. Foreign employees are also covered under the Workers' Compensation compulsory program.

Marine

• Available Wordings:

Crime

• Available Coverages:
  Theft, Burglary, Fidelity and Surety. Robbery and Burglary, Malicious Acts of third parties are covered under Property policy.