Compulsory motor third party liability e-insurance policy: more affordable now

The Bank of Russia proposes that it should be binding on all the insurers operating in the OSAGO (compulsory motor third party liability insurance) market to make such contracts electronically all over Russia from 1 January 2017.

OSAGO policy e-sales were launched in Russia on 1 July 2015. However, it is the right of an insurance company to execute an electronic contract, rather than the obligation. At present 15 out of 81 insurance companies licensed for compulsory motor third party liability insurance are offering electronic policies.

'The Bank of Russia initiative is primarily intended for higher availability and quality of OSAGO, because car owners will be able to purchase a policy at any time, in any place, irrespective of the vendor location', Vladimir Chistyukhin, Deputy Governor of the Bank of Russia, said.

The Bank of Russia took a decision to prepare amendments to the legislation to put the novation into practice.

While working out the bill, the Bank of Russia will specifically focuse on continuity of OSAGO e-service. 'Special requirements will be introduced for insurers and the Russian Association of Motor Insurers to provide uninterrupted operation of relevant information systems. The Bank of Russia will supervise the compliance with the requirements', Vladimir Chistyukhin explained.

After the draft bill is ready, it ts planned that it will be promptly approved by the Ministry of Finance and presented at the spring session of the State Duma.