Association representatives expressed the opinion that the proposed concept, developed by the cabinet of ministers, contradicts the goals of developing the insurance sector. They noted that this document creates a model of excessive centralization of administrative functions in the hands of a single state structure.
According to IBC members, the implementation of this initiative could lead to a decrease in competition, an increase in the industry's dependence on the decisions of a single player, and the displacement of private insurance companies from the market.
There are also concerns about the potential consequences of the reform for key sectors of the economy, such as energy, transport, mining, and infrastructure. The council emphasized the importance of the stability of the reinsurance system for the stable functioning of these sectors.
“Disruption of reinsurance protection in the mentioned sectors could lead to the suspension of current projects, limited access to financing, and increased systemic risks for the economy,” they added.
Experts also pointed out the likelihood of a conflict of interest, as the project proposes combining the functions of a national reinsurer and a direct insurer, which gives the state structure access to confidential commercial information of competitors.
As a result of the discussion, the International Business Council proposed to withdraw the draft resolution from public discussion for a complete overhaul. The business community also plans to initiate changes to the presidential decree of March 20, 2024, to create a balanced market model rather than an administrative monopoly.
It is worth noting that the cabinet of ministers has put forward for public discussion a draft resolution on the creation of a national reinsurance operator, which is proposed to be designated as the State Insurance Organization (GSO). This document was developed in accordance with the presidential decree of March 20, 2024, No. 79 on the development of the insurance market.
According to the draft, insurance companies will be required to transfer part of their risks to the GSO for reinsurance in an amount of no less than 10 percent, with a subsequent increase in the share to 50 percent. The justification for the initiative states that in 2024, about 85 percent of risks were reinsured abroad. Authorities believe that centralizing operations will help reduce the outflow of insurance premiums and strengthen the national insurance market.
Reinsurance is a mechanism for distributing insurance risks, whereby insurance companies transfer part of their responsibility to other insurers, including foreign ones. This approach allows for the effective coverage of large and complex risks associated with energy, transport, mining, and infrastructure assets.
