The Ministry of Finance of the Russian Federation (the “Ministry of Finance”) has not supported the proposal of the Federal Service for Financial Markets (the “FSFM”) to create a guarantee fund for insurers. The FSFM suggested creating such a fund at the beginning of 2012 in response to the bankruptcies of Rosstrakh and Rostra insurance companies, respectively.
The Ministry of Finance believes that if the creation of such a guarantee fund were mandatory, there would be a strong possibility of insurers shifting their responsibility to other participants of the insurance market or to the government. Additionally, such a decision could lead to an increase in insurance rates and a decrease in the motivation of insurers to perform their duties in good faith.
The Ministry of Finance believes that current legislation is sufficient to protect the clients of insurance companies that are in the process of terminating their activity.
[Information on this matter may be read in Russian at http://izvestia.ru/news/523733]