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Finance Ministry Gives Green Card Red Light
The Finance Ministry has given a negative review to the amendments to the mandatory auto liability insurance (OSAGO) law that would allow Russian insurers to issue “green cards” to extend insurance coverage beyond the borders of Russia. The ministry disagrees with the requirement that the card be bought for Russian issuers. The amendments were prepared by State Duma members Vladislav Reznik and Alexander Koval and were approved in their first reading by the Duma Banking Committee last Thursday.
The Finance Ministry has objected that the green cards cannot be called mandatory according to the strictures of the law “On the Development of the Insurance Business in the Russian Federation.” In addition, the amendments describe the cards as an “agreement,” which is also at variance with legislation in force. According to Vera Bakalireva, deputy director of the Finance Ministry financial policy office, the cards should properly be called “cards.”
“There is a substantive disagreement behind the dispute over terminology,” Bakalireva added. Insurance executives tell Kommersant that there is a good reason for the obligatory nature of the Russian-issued green cards. Russian insurers, unlike foreign insurers, are required to make a deposit of €500,000 to participate in the system. Foreign insurers can issue cards at dumping prices.
Legislator Reznik noted, however, that “Their obligatory nature makes it possible to direct the financial flows from the green cards toward the domestic market. When agreements were created for this type of insurance, it was obligatory everywhere at first and only later became voluntary.” He named Ukraine and Belarus as examples of that practice with green cards. Russia plans to join the green card system in January 2009.
www.kommersant.com
All the Article in Russian as of Sep. 11, 2007
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