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Bank of Russia eases new requirements for insurers’ capital

14 April 2022

The regulatory easing will reduce the burden on insurers’ capital in complicated market conditions without affecting companies’ financial stability.

Pursuant to a decision made by the Bank of Russia Board of Directors, through 31 December 2022, insurers will not need additional capital to cover market risks and they will need a considerably lower amount of capital to cover credit risks. This has become possible because scenarios of a deteriorating market situation will not be used in capital calculations, and credit risk assessments will be replaced for less conservative ones.

These measures ease the requirements becoming effective on 1 July 2022 and obliging insurers to reserve capital to cover market and credit risks. Insurers will be allowed to calculate capital taking into account the sanctioned payments due from the European settlement centres Euroclear Bank and Clearstream Banking and from international reinsurers.

These support measures are applicable only to those insurance companies that have not announced dividend payouts or profit distribution after 18 February 2022.

By making this decision, the Bank of Russia has also approved a number of measures decreasing the operational burden and expanding investment opportunities for insurers and non-governmental pension funds.

Preview photo: Shutterstock / Fotodom
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