Bank of Russia discusses repair under OSAGO insurance

The Expert Council on Insurance attached to the Bank of Russia discussed today key requirements for automotive repair as a priority form of OSAGO (compulsory motor third party liability insurance) indemnity payment.

Under new legislation currently in the State Duma, in the case of OSAGO, insurance indemnity paid in kind would take precedence over payment in cash. The Bank of Russia believes that extended use of repair as OSAGO insurance indemnity would help address several problems in the industry, which have undermined the availability of this service in almost a third of Russian regions, where sales of OSAGO policies are impeded by the lack of economic stimulus to insurers.

Should the cash indemnity provision be excluded from legal relations between the insurer and the claimant in stipulated cases, firms in the car insurance market would be economically disinterested, while the principle of guaranteed damages to the claimant would remain intact, the regulator’s representatives noted.

The expert insurance panel members exchanged views on what would be feasible repair deadlines, subject to the scope of works and their complexity, technical standards for automobile repair shops as regards their accessibility and reservation of original car manufacturer warranty.

The Bank of Russia will look into the experts’ proposals when approving the relevant requirements.