“The flood in the Far East has shown that the absence of insurance for damage to housing compels the Government to assume huge financial obligations.”
Dmitry Medvedev’s opening remarks:
Meeting on compulsory insurance for personal and corporate property damage as a result of fires, floods and other calamities
Good afternoon. Today we’ll resume the discussion of an issue that is of considerable financial, and not only financial, importance for the state. I’m referring to insurance for property damage caused by natural disasters. We’ve repeatedly discussed this subject at government meetings. Regrettably, we haven’t come to any final conclusions on what should be done, and problems continue to arise. The flood in the Far East has shown that the absence of insurance for damage to housing compels the Government to assume huge financial obligations. Our country is vast and complicated, and the risks of natural calamities are high. It's clear that such problems will arise in the future despite all our actions and intentions to resist such processes. By way of example, let me tell you that the construction and repair of housing in the Far East will cost almost 14 billion roubles. For the most part, this sum will be paid from the federal and regional budgets.
D.Medvedev: The construction and repair of housing in the Far East will cost almost 14 billion roubles. For the most part, this sum will be paid from the federal and regional budgets.
I’ve instructed the Ministry of Finance to prepare proposals on housing insurance. We’ve always discussed two aspects of this issue. First, it makes sense to return to the compulsory system that existed in Soviet times. It has one obvious advantage, in that it will cover all private housing. But there are also some legal and organisational drawbacks (not to mention the financial burden that it will create for our people). Second, there are also contracts for voluntary insurance, which people should be encouraged to sign.
I’ve just discussed this issue with Mr Shuvalov. There are many cases when it makes sense to sign contracts, but neither companies nor people are doing this. I’m referring to harvest insurance. It would seem logical to insure it by all means, but only 10% of areas sown for crops are insured. In part, this happens because people have no confidence in the insurance system – but only in part. In any event we’ll have to decide what road to follow.
I know that the Ministry of Finance has elaborated a draft law on housing insurance contracts, which is based on several provisions. Let’s discuss it, of course, but I still suggest that we review this issue on a broad basis, and talk about different opportunities. It is time to make a decision that is long overdue. We spoke about this in 2012 when we also had a number of disasters and severe accidents, and we are talking about this now, but our discussions have not yet produced any document.
This is what I suggest, by way of conducting our discussion. We have invited to this meeting ministers, Moscow Mayor Sergei Sobyanin, and representatives of the expert community and insurance companies. Let’s get to work.
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