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Russian industrial plants turn to state reinsurer as US sanctions bite

Russian National Reinsurance Co. JSC has signed contracts providing cover for "dozens" of industrial plants as U.S. sanctions prevent their owners from transferring risks to Western providers.

Russian National CEO Nikolay Galushin told Reuters that the state reinsurer has "taken the risks of all who had pulled out" of reinsuring the industrial plants for risks such as a production halt following the U.S. sanctions. He did not reveal which companies have transferred risks to the state reinsurer.

Galushin said the reinsurance liability limit for the single event on the "new (sanctioned) risks" is above 20 billion rubles. He also said the company has enough funding to shoulder payouts under commercial contracts, adding that the central bank is on standby should there be a payout to a sanctioned company.

The state reinsurer has approximately 21.3 billion rubles in capital and a central bank guarantee worth 49.7 billion rubles, Reuters reported.

As of June 15, US$1 was equivalent to 63.20 Russian rubles.