The draft federal law, On Amending Article 11 of the Federal Law on Compulsory Liability Insurance of Carriers for Causing Harm to the Life, Health or Property of Passengers and the Procedure for Compensating Such Harm to Passengers Travelling on the Metro, has been prepared by the Finance Ministry. Federal Law No.67-FZ of June 14, 2012 On Compulsory Liability Insurance of Carriers for Causing Harm to the Life, Health or Property of Passengers and the Procedure for Compensating Such Harm to Passengers Travelling on the Metro (Part 3 of Article 11) states that the limits on insurance rates that are dependent on the form of transport and kind of carriage and influence the degree of risk are to be determined by the Government of the Russian Federation.  However, the law does not contain provisions empowering the Government to define the structure of the insurance rate.

In the view of the Finance Ministry, the absence of this norm could prompt an insurer who wants to take out a license for this kind of compulsory insurance to suggest such a structure of the insurance rate, which might result in the insurer holding insufficient reserves and, as a result, lead to the insurer’s bankruptcy, also rendering it impossible to make timely insurance payments in full. A similar situation could also occur due to the impossibility by a professional association of insurers to make compensatory payments in cases provided for by the law. In order to prevent such problems from arising, Government Resolution No. 1344 of December 20, 2012 On Approving Limits on Insurance Rates under Compulsory Liability Insurance of Carriers for Causing Harm to the Life, Health or Property of Passengers also approved the structure of the insurance rate.

The draft law aims to resolve the conflict of laws by adding to Article 11 of the federal law a norm granting the Government of the Russian Federation the right to define the structure of the insurance rate by determining the overall possible spending on compulsory insurance and the size of contributions to the compensation payments reserve when establishing limits on insurance rates.

The draft law was considered and approved at a Government meeting on June 13 2013.