Share of foreign capital in Russian insurance companies may go up to 25 percent

Russia's Finance Ministry favours an increase of an allowed foreign-owned stake in Russian insurance companies to 25 percent and is already preparing appropriate amendments to the federal law "On Organization of Insurance Business in the Russian Federation", Alexei Kudrin, a Deputy Prime Minister and the Finance Minister, said on Saturday.

According to him, experts are currently studying legal validity of the proposed amendments.

The existing law limits the foreign-controlled stake in Russian insurance companies' total equity capital to 15 percent. This threshold needs to be raised in view of Russia's planned accession to the WTO, Alexei Kudrin said.

He reminded the audience that Russia signed the Cooperation and Partnership Agreement with the European Union in 1999, under which it undertook to open the Russian insurance market to European companies. The Minister acknowledged that the EU's dissatisfaction over Russia's failure to comply with its obligations under the Agreement was "justified".