President Vladimir Putin has signed a law banning insurers in Russia from conducting business with insurers, reinsurers and brokerage firms from ‘unfriendly states’. The move comes in response to economic sanctions imposed by western nations against Russia, because of Mr Putin’s invasion of Ukraine. The measures include banning Russian businesses from accessing international services.
The law, issued by the Russian parliament, prohibits insurers in Russia from ceding risks to carriers from the UK, US, Japan, Switzerland and all EU states until 31 December 2022.
In addition, it states that the Bank of Russia board shall assume the authority to determine the obligations that are not subject to transfer by a cedent to a national reinsurer for reinsurance protection.
The bank will also have the right to determine the data that financial organisations have the right not to disclose to the public as the parliament prevents “disclosure by financial organisations of any information that can be used by the unfriendly states to impose sanctions.”
According to the Kremlin, this federal law is “aimed at ensuring the financial stability of the Russian Federation due to hostile moves by foreign states and international organisations and introduces a special regulation of relations in the financial market and corporate relations”.
Last month, as a result of the invasion, several reinsurers announced ceasing operations in Russia including Swiss Re which ceased new and renewal business in Russia. Other global players that took the same step include Hannover Re and Generali. International brokers Marsh McLennan, WTW, and Aon have also decided to put on hold doing business in the country.
Munich Re has also recently joined the growing list of providers that have suspended new business in Russia and Belarus. M