The central bank of Russia is supposedly discussing the possibility of providing reinsurance cover to insurers unable to obtain traditional reinsurance because of international sanctions regimes according to the chairman of Russian insurer Sogaz.
The talks were revealed by the Sogaz's Sergei Ivanov who said that there was a variety of reinsurance alternatives being discussed by Russian companies in opposition to US sanctions.One of the possibilities being considered is the creation of a state reinsurer, but no plans have been decided so far, said Ivanov.
The industry is concerned about the impact of Western sanctions on the insurance Russian market.
Sogaz could be sanctioned under new US rules which state that any company that is more than 50% owned by two or more sanctioned parties could be a target of sanctions. Sagaz is more than 50% owned by the combination of OAO Bank Rossiya and Volga Group.
The US added Bank Rossiya and its billionaire shareholder Yury Kovalchuk to a sanctions list on March 20, following Russia's annexation of Crimea.It also put billionaire Gennady Timchenko on the list of blocked individuals at that time, and in April the government added Timchenko's Volga Group to the list.
The creation of a state reinsurer would mirror similar actions from the Indian government which set up a reinsurance operation to provide support to Indian insurers covering Iranian oil when US and EU sanctions against Iran were at their height.
Ivanov said that there was a number of reinsurance options for Russian insurers, including the London market but that all potential options were being discussed.It is not known yet whether the EU will match US sanctions on Russian individuals, if it did follow suit that would limit Russian reinsurance options further.