OREANDA-NEWS. January 28, 2010. The Government of the Russian Federation issued No. 1199 Order to approve the Rules for Granting and Allocating Subsidies from the Federal Budget to the Budgets of Constituent Territories of the Russian Federation to Compensate Some of their Expenses for Insuring Output Yield of Agricultural Plants, Perennial Plantings (the Rules 1199), reported the press-centre of FAS Russia.

The Order eliminated excessive, competition-restricting requirements to insurance organizations of the Rules for Granting Subsidies from the Federal Budget to the Budgets of Constituent Territories of the Russian Federation to Compensate Some of their Expenses for Insuring Output Yield of Agricultural Plants, and Perennial Plantings in 2009-2011" approved earlier by No.1091 Order of the Government of the Russian Federation of 31st December 2008 (the Rules 1091).

From 1st January 2010 subsidies shall be granted upon meeting the requirements for agricultural insurance services, specified in Clause 4 of Rules 1199, in particular, when an agricultural producer enters into an insurance agreement with an insurance organization that is licensed to provide agricultural insurance and meets one of the following requirements:

- actual solvency margin rates exceeds the normative one, determined in accordance with the procedures specified by the Ministry of Finances of the Russian Federation;

- Re-insurance, factored in assessment of its financial soundness, of some risks of insurance payments under insurance agreements in insurance organizations licensed for Re-insurance;

Earlier FAS Russia asked the Government of the Russian Federation to charge the Russian Ministry of Agriculture, the Ministry of Economic Development, the Ministry of Finances, the Ministry of Regional Development and FAS Russia devise as soon as possible amendments to Rules 1091 to eliminate excessive requirements to insurance organizations, which created privileges for certain insurance organizations and restricted competition on the market of agricultural insurance with state support.

In particular, it is proposed to discard Sub-Clauses "а" - "c" from Clause 5 of Rules 1091 that set additional requirements to insurance companies (no lower than satisfactory rating assigned by one of international or Russian rating agencies; at least 850 million net assets; the share of agricultural insurance premiums in the insurance portfolio is no more of 20% of the total premiums). It is also proposed to introduce amendments to Clause 6 of Rules 1091 to establish from 2010 a responsibility to re-insure the risks under the agreements for insuring output yield of agricultural plants and perennial plantings with state support by all insurers providing such type of insurance using the services of any insurer that has a re-insurance license.