OREANDA-NEWS. The Bank of Russia Board of Directors approved Ordinance No. 3604-U, dated 20 March 2015, 'On Amending Bank of Russia Ordinance No. 3384-U, Dated 19 September 2014, 'On the Limits of Insurance Tariff Base Rates and Ratios, Requirements for Insurance Tariff Structure, and the Procedure for Their Application by Insurers when Calculating the Insurance Premium for Compulsory Motor Third Party Liability Insurance'.

The Ordinance updates insurance tariffs for the compulsory motor third party liability insurance due to the implementation of legislation stipulating an increase in the insurance indemnity for damage to life and health of the aggrieved persons from 160,000 rubles to 500,000 rubles from 1 April 2015, as well as a new procedure for reimbursing expenses on the recovery of the aggrieved persons. The adjustment also took into account the rise in prices of car spares and components due to the ruble depreciation.

According to Bank of Russia estimates, the share of payments related to the damage to life and health may grow from the current 1% to 21% of the total amount of payments under the compulsory motor third party liability insurance.

The Ordinance changes the minimum and maximum insurance tariff base rates ('tariff corridor'), as well as insurance tariff ratios depending on the territory of primary use of vehicles in certain constituent territories of the Russian Federation (territorial ratios (TR)).

The need to change insurance tariffs under the compulsory motor third party liability insurance was caused by a backlog of imbalances in the system of compulsory motor third party liability insurance, which had an adverse impact on financial accessibility of this type of services and made it actually impossible to acquire the compulsory motor third party liability insurance policies in a number of regions.

The rise in minimum base rates for the large part of vehicle categories will equal 40% with the tariff corridor expanding from 5 to 20 percentage points. A decrease in minimum base rates and establishment of a larger tariff corridor are envisaged for certain vehicle categories. The new values of base rates and the tariff corridor will become effective from 12 April 2015.

The territorial ratios will increase in 11 constituent territories of the Russian Federation and decrease in 10 regions and the city of Baikonur. The said amendments will take effect on 1 April 2015.

The Ordinance has been submitted to the Ministry of Justice of the Russian Federation for state registration.