Imputed types of insurance: public discussion to start

Currently, in as many as 61 types of imputed types of insurance in Russia the insurer is legally obliged to make an insurance contract. In most cases imputed insurance is a prerequisite to a certain activity (e.g. for notaries, receivers etc.). This type of insurance may be intended to protect the life and health of certain individuals exposed to risk (e.g. patients in clinical trials, private security firms’ employees) and to provide guarantees to individual categories of government employees, in some cases.

The Bank of Russia’s report presented for discussion includes an analysis of current regulation, law enforcement practices, statistical data on 45 types of imputed insurance, and examples of global practices. The study does not cover types of insurance that use public funds.

The regulator found the level of payouts in several types of insurance to be extremely low with a high share of refusals to pay. The overall ratio of insurance payouts to premiums in imputed insurance is no more than 17.2%, while the same ratio is 68.6% in compulsory insurance and 32.5% in voluntary types.

Among other acute problems are the lack of control over the insurer’s compliance with its obligations and the need for enhancements in legal regulation of multiple types of imputed insurance.

The Bank of Russia proposes that social value and demand for each type of imputed insurance be defined in opening stages, based on statistical data, an estimated scale of consequences that may arise in the event of an insured accident, international commitments, and other factors.

In the second stage, focus should turn to the issue of weak points in the regulation of specific types and their elimination, as well as options for enforcement tools.