New procedure to generate OSAGO price directories proposed

The Bank of Russia has prepared a draft new edition of the ‘Unified Methodology for Calculating Expenses on Corrective Maintenance of Damaged Vehicle’ under the OSAGO (third-party liability cover) agreement.

The main difference between the new and the old versions lies in the procedure for the generation and approval of directories. In particular, it is assumed that directories will be generated separately for each constituent territory of the Russian Federation and updated every three months. Before publishing, the professional insurance association will have to place a new version of a directory on its website and gather comments from experts.

The draft document also specifies sources of information about prices of spare parts, and amends and clarifies the procedure for the determination of the final price to be used in the directory. Furthermore, in certain cases, an expert technician will be able to independently investigate how the spare part price is formed.

Another important new feature is the procedure to determine the loss of commodity value of the vehicle as a result of its damage and repairs.

While drafting the document, the regulator took into account established practice in applying the law and proposals received from interested parties, including insurance market participants, expert organisations, dealers, manufacturers, and federal executive authorities.

The proposed approaches are aimed at increasing transparency of the formation of price directories and excluding ambiguous wording that used to cause disputes in the expert and insurance communities.