Fraud risks in Russian regions to affect CMTPLI policy prices
The Bank of Russia proposes that the procedure for calculating the local coefficient (LC) should be changed. If a region registers a high risk of misconduct in compulsory motor third-party liability insurance (CMTPLI) for a long period, a 100% higher LC will apply there when calculating the policy price. The new rules for setting CMTPLI rates are set out in the Bank of Russia draft ordinance published for public consultation.
The Bank of Russia will list such regions based on their location in the high-risk zone. According to the Monitoring of Regional Misconduct Risks in CMTPLI, the above regions include the Republic of Ingushetia (since 2019) and the Novosibirsk Region (since 2021). The Bank of Russia proposes that the LC value be increased for the eight territories located in these regions. From 2023 to 2025, the number of regions characterised by high misconduct risks (the ‘red’ zone according to the Monitoring) has fallen from 12 to 2. Over the past 12 months, the Republic of Dagestan and the Chechen Republic have been removed from the ‘red’ zone, due to the active efforts of the regional authorities.
The Bank of Russia will also update the reference LC value for a number of regions, taking into account the indicators of current losses in CMTPLI.
Furthermore, the document expands the rate range upwards and downwards by 40% for motorcycles and by 15% for all other categories. This is necessary for maintaining fair pricing amid higher prices for spare parts and CMTPLI payments. The last time the rate range was changed for ordinary car drivers was in September 2022. Nevertheless, the average payment substantially increased: over the first six months of 2025, it went up by 17% year on year and by 56% vs the same period of 2022.
After the expansion of the rate range, insurers will still be able to offer cheap policies to experienced and careful drivers, due to a more accurate rate-setting procedure for drivers incurring high losses. In 2025 Q2, standard policies (excluding short-term ones) issued to motorcycle drivers and to ordinary car drivers, priced based on the upper bound of the current rate range, accounted for 58% and 29% of all policies provided, respectively. As of the end of the first six months of 2025, the average premium for ordinary car drivers dropped by 4%. This reduction amid the simultaneous rise in the average payment is a result of accurate rate setting within the expanded rate range for high-risk policy holders and competition for low-risk drivers.
The Bank of Russia welcomes any suggestions and comments through 7 September 2025.