Putin sanctions amendments and additions to law "On the organization of insurance industry in Russia"

President Vladimir Putin has signed a federal law "On Amendments and Additions to the Law of the Russian Federation 'On the Organization of the Insurance Industry in the Russian Federation' and Recognition As Invalid of Some Legislative Acts of the Russian Federation." Signed today, the law was adopted by the State Duma on November 19 and approved by the Federation Council on November 26, 2003, the press-service of the head of state reported on Friday.

The amendments and additions made to the law "On the Organization of the Insurance Industry of the Russian Federation" are aimed at improving relations connected with the organization of insurance business in Russia.

The law, for example, specifies the concepts "insurance" and "insurance activity /insurance business/", fixes forms of insurance, and determines the provisions which must be contained in federal laws about concrete kinds of obligatory insurance.

Besides, the law gives a detailed definition and classification of objects of insurance, depending on which basic kinds of insurance are defined /personal and property insurance/, and lists the subjects of insurance.

The federal law increased by 25 per cent the quota of foreign capital in the charter capital of insurance organizations.

In regard to insurance organizations that are members of the European communities parties to the Agreement on Partnership and Cooperation of June 24, 1994, they are totally freed of restrictions on life insurance, obligatory insurance, obligatory state insurance, property insurance connected with deliveries or performance of contract work for state needs, and also insurance of property interests and municipal organizations.

Besides, the federal law, with regard to the above-mentioned insurance companies, lifts restrictions which earlier demanded obligatory payment by foreign investors for their shares /allotted portions/ in the charter capital of insurance organizations exclusively in Russian rubles.

The law also removes the former restriction on the discharge by foreign citizens of the functions of a single executive body and chief accountant of the insurance organization with foreign investments.

The law defines the concept "insurance actuaries", specifies such notions as "insurance sum", "insurance payment", "insurance premium" and "insurance tariff" and also sets new requirements to guaranteeing the financial stability of insurers, including coefficients depending on the object of insurance.

Besides, the law regulates new requirements to licensing the insurance business and introduces a detailed classification of kinds of insurance.

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Author`s name Editorial Team