There is the perception of the insurance sector as a sphere where, as a rule, the client is being cheated, and where the main goal is to collect insurance payments and then to pay out as few insurance benefits as possible.
Those were the words used by Dmitry Pankin head of Russia’s Federal Service for Financial Markets (FSFM) to describe, er, the insurance sector, we think. Mr Pumpkin’s harsh words reflect the puzzling fact that Russian politicians are far less keen than their UK counterparts to do as they’re told by insurance companies.
Yes, Bankstone News was fascinated to read this week in Euro insurance news organ Insurance Insights that, in the land of vodka and more vodka, insurers and state officials are squaring up something vicious over compulsory motor third-party loss insurance (CMTPLI).
The problem is, as far as Bankstone News can make out from Insurance Insights’ distinctly dry and acronym-heavy report, that the Russian State Doomer is in the process of implementing legislation that would more-than-double the maximum CMPLTLI limits, but will not allow insurers to increase their rates by more than a modicum. More worryingly still, motor insurers are apparently being held against their will in something called a ‘tariff corridor”.
Pavel Bunin, head of the Russian Association of Motor Insurers (RAMI), is incensed, claiming that CMPTIBL rates need to increase by over 70% and that motor insurers will simply not survive unless they are released from the narrow and airless ‘corridor’. In a recent letter to the Russian Government, RAMI members complained that the situation was becoming critical and that the market could be on the verge of collapse.
Sadly, RAMI’s representations have left the Russian state unmoved. First Deputy Prime Minister Igor Shuvalovalov branded RAMI’s warnings ‘unskillful blackmail’, stating very clearly that the Russian government does not take orders from insurance companies, but will make any changes to its ‘tariff corridor’ regime based on ‘additional calculations’.
Motor insurers in turn professed themselves dismayed at this response and are threatening to withdraw from the CMLPTI sector, with two major insurers already reducing their presence in the market. For their part, government representatives have heard enough from sniveling motor insurers and are now refusing to attend RAMI meetings.
How very unlike the UK, where politicians and insurers are forever sitting down and agreeing things in a civilized and amicable fashion.
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