On procedure for investing insurance reserve funds and list of assets eligible for investment

The Bank of Russia issued Ordinance No. 3444-U, dated 16 November 2014, ‘On the Procedure for Investing Insurance Reserve Funds and the List of Assets Eligible for Investment’ (hereinafter, the Ordinance), registered with the Ministry of Justice of the Russian Federation on 22 December 2014 under the Registration No. 35297. The Bank of Russia Ordinance became effective on 11 January 2015, at the same time Order of the Russian Ministry of Finance No. 100n, dated 2 July 2012, ‘On Approving the Procedure for Insurers to Place Insurance Reserves’ expired.

The Ordinance determines a list of assets eligible for investment and a procedure for investing insurance reserve funds providing for the requirements to securities issuers or securities issues depending on their ratings and inclusion in quotation lists by trade organisers in the securities market, and for the structure of assets eligible for placing of insurance reserve funds (including the requirements providing for the maximum acceptable percentage of value of each type or group of assets of the amount of insurance reserves or certain types of insurance reserves).

Insurers are required to ensure compliance of the composition and the structure of assets insurance reserve funds are invested in with the Ordinance within 20 calendar days after it becomes effective. Meanwhile, a 180-day transition investment period is provided for the assets not complying with the Ordinance requirements in case the insurer had invested its own funds (capital) or insurance reserve funds in these assets as of the date preceding the day the Ordinance became effective.

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