Growing premiums do not guarantee payouts

The insurance market is usually judged by premium volumes, but for a client something else matters more: whether the company can meet its obligations. Sometimes an insurer sells policies aggressively and then cannot cope with claims — because of underestimated risks, aggressive discounts or weak capitalisation. That is why the regulator monitors not only sales but also whether the company has enough capital and reserves.

How the Bank of Russia supervises insurers

Since 2013, the insurance market has been supervised by the Bank of Russia. Requirements for insurers are set by Russian Federation Law No. 4015-1 "On the Organisation of Insurance Business in the Russian Federation" and by the regulator's regulations. The key ones are:

  • minimum authorised capital — the amount depends on the types of insurance the company offers;
  • insurance reserves — funds the company must set aside for future claims;
  • investment requirements — reserves and own funds may be placed only in permitted assets, with concentration limits;
  • financial stability and solvency — regular reporting and calculation of prudential ratios;
  • reinsurance — passing part of large risks to other insurers and reinsurers.

In case of violations, the regulator may issue an order, restrict or suspend the licence, appoint a temporary administration and, as a last resort, revoke the licence. Revocation means the company can no longer operate on the market. How to assess an insurer's stability using public data is explained in "Financial Stability of Insurers".

What happens after a licence is revoked

Once the revocation decision takes effect, the company may not conclude new contracts or make changes to existing ones that increase its obligations. The law gives it a period to settle claims for insured events that have already occurred and to transfer contracts to another insurer or refund part of the premium to clients. Contracts under which no insured event has occurred terminate within the period set by law. What happens next depends on the type of insurance.

OSAGO

Road accident victims are the best protected. If the at-fault driver's insurer has lost its licence or been declared bankrupt, the victim receives a compensation payment from the Russian Union of Motor Insurers (RSA) under Article 18 of Federal Law No. 40-FZ, within the same limits — 400,000 rubles for property and 500,000 rubles for harm to life and health. If you are the victim and your own insurer has lost its licence, the claim is filed with the at-fault driver's insurer.

It is important for a car owner not to be left without a valid policy: once the contract terminates, buy a new OSAGO policy (compulsory motor third-party liability insurance) from another company and claim a refund of part of the premium for the unused period.

Life insurance

From 1 January 2027, Russia will have a scheme guaranteeing the rights of individuals under life insurance contracts (Law No. 477-FZ of 26 December 2024). It is operated by the Deposit Insurance Agency (DIA, or ASV in Russian), and life insurers will pay contributions to the guarantee fund. If a life insurer's licence is revoked, individuals will be able to receive a guarantee payment: up to RUB 10 million for death-related payouts and up to RUB 2.8 million for other payouts. Until then there is no DIA guarantee for life insurance — customers' claims are settled in the insurer's liquidation or bankruptcy.

Other voluntary insurance

For KASKO, property insurance, VHI (voluntary health insurance) and most other voluntary policies there is no separate guarantee scheme. Clients' claims are entered in the register of creditors' claims and satisfied in the order established by the bankruptcy law. That is why it is important to file a claim for insured events or a premium refund immediately and to keep all documents.

What a client should do

  1. Check the company's status in the Bank of Russia register of insurance market participants.
  2. If an insured event has already occurred, file a claim as soon as possible and obtain confirmation that it was received.
  3. If there has been no insured event, request a refund of part of the premium for the unused period.
  4. Take out a new policy with another company — especially for OSAGO or insurance of mortgaged property.
  5. Follow announcements from the temporary administration and the bankruptcy trustee.

How to reduce the risk in advance

  • choose companies with a valid licence, transparent owners and a credit rating from an accredited agency;
  • be cautious about prices well below the market — especially in voluntary insurance;
  • for long-term endowment and investment life insurance contracts, find out who stands behind the company and how it invests the funds;
  • for large corporate risks, ask how reinsurance is arranged.

Learn more about choosing an insurer in the article "How to Choose an Insurance Company in Russia". Insurer profiles are in the directory, protection of large risks is covered in the Reinsurance section, and the legal framework is in the Laws section.