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Russian regulator unveils measures to stabilize compulsory motor insurance

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Russian regulator unveils measures to stabilize compulsory motor insurance

The Russian central bank decided to widen the tariff corridor used to set prices for the compulsory third party motor insurance by 20% from the summer 2018 as part of efforts to stabilize this insurance segment, Vedomosti reported May 15, citing the regulator's deputy head Vladimir Chistyukhin.

The central bank also plans to revise some of the parameters that affect the final price of compulsory third party motor insurance policies, including those related to the driver's age and experience, as well as bonuses awarded for accident-free driving.

Losses of Russian insurers stemming from their operations in the compulsory third-party motor insurance segment amounted to 15 billion rubles in 2017. The widening of the tariff corridor will improve competitiveness in the segment and will increase the availability of insurance products of this type across Russian regions, Chistyukhin was cited as saying.

In the fall of 2018, the central bank plans to launch the second phase of its reform aimed at stabilizing the segment, with plans including the implementation of legislation that would allow insurers to set individual tariffs for their clients, and the introduction of a system that would automatically widen the tariff corridor.

The third stage of the reform, which is expected to be launched not sooner than in mid-2020, envisages the lifting of all price-setting restrictions for insurers operating in the segment, including the tariff corridor itself.

As of May 15, US$1 was equivalent to 62.55 Russian rubles.