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Russian state reinsurer does not rule out it may come under international sanctions

August 24, 13:32 UTC+3
In late July, the Central Bank decided to set up the National Reinsurance Company (NRC) and formed part of its supervisory board
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MOSCOW, August 24. /TASS/. The National Reinsurance Company (NRC), established by Russia’s Central Bank to protect the interests of sanctioned Russian entities, does not rule out that it may also come under the regime of international sanctions, head of the reinsurer Nikolai Galushin told reporters.

"The map of risks for NRC includes a risk that the company may come under the regime of international sanctions, but the company is a Russian legal entity, it takes risks for reinsurance on the Russian market and even sanctions will not affect the company’s activities," Galushin said.

According to him, NRC does not consider the outgoing insurance market and being under sanctions won’t affect the activities of the company.

Galushin named enterprises of defense sector as an example of the sanctioned entities that require immediate reinsurance in the NRC.

"But this is not only the military industrial complex, we have legal and physical entities which came under the sanctions of the US and the EU," Galushin said. He added that the potential volume of compensations to sanctioned entities is estimated at least at 5 bln rubles ($77 mln).

Galushin also said that under the law, the NRC is obliged to reinsure to 10% of risks related to sanctions from the companies that submitted their requests for reinsurance. As for other types of risks the reinsurer has the right not to accept of them for reinsurance.

Under the law the NRC is to start its activities two months after it receives the CBR license to carry out reinsurance. The company’s CEO plans to get the license in October. On the first stage, the staff of NPC will consist of about 30 people. In the future it will be expanded as the company’s business grows.

At present, the Supervisory Board of NPC has been approved. It includes of 10 people and 6 of them are representatives of the Central Bank. The Board of Directors also included the president of the All-Russian Union of Insurers Igor Yurgens.

The company’s authorized share capital is 71 bln rubles ($1.1 bln). Paid-up capital is 21.3 bln rubles ($328 mln).

Under the law, the company is fully owned by the Central Bank.

In late July, the Central Bank decided to set up the NRC and formed part of its supervisory board. The Central Bank pointed out that the establishment of NRC will significantly increase the capacity of the Russian reinsurance market providing insurance to businesses that lost it due to sanctions and impossibility of reinsurance of their risks abroad.

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