The Central Bank believes that it will be possible to talk about combining MTPL and comprehensive insurance policies into a single product only after the reform of MTPL and the transition to individual tariffs, Svetlana Nikitina, deputy director of the insurance market department, said on Thursday, May 23. The Central Bank has already notified the Ministry of Finance about this, she said.

At the end of April, Russian Prime Minister Dmitry Medvedev instructed the Ministry of Finance, the Ministry of Economic Development and the Ministry of Justice, together with the Central Bank, to discuss whether compulsory motor liability insurance should be included in insurance coverage under a voluntary car insurance agreement (hull insurance), and to report on the results of the discussion by June 1, 2019.

A proposal to create a universal policy for motorists with two types of insurance was simultaneously made by State Duma deputy Vyacheslav Lysakov. Medvedev called this idea reasonable and interesting from a financial point of view, but suggested checking whether it is possible to combine compulsory and voluntary insurance in one product.

The merger of compulsory motor liability insurance and comprehensive insurance will require significant changes in legislation, Nikitina suggested: “If only because the subjects of regulation in this situation are different, the objects of insurance are different.” In international and Russian practice, combined MTPL and comprehensive insurance agreements still exist, Nikitina knows, it’s just that two agreements are actually concluded. OSAGO insures the motorist's liability for damage to the health and property of third parties, and comprehensive insurance insures the property of the car owner. OSAGO is a mandatory service, Nikitina continued, and if you combine it with comprehensive insurance, the new product will also be mandatory. But it is impossible to oblige citizens to insure their property; this is contrary to the Constitution, Nikitina believes.

She also doubts that there will be demand for a single product if both types of insurance are now combined. The Central Bank does not see a serious need for a single policy either from consumers or from the market, she emphasized.

It is advisable to carry out serious changes in compulsory motor liability insurance after the Central Bank completes the reform, the purpose of which is to individualize tariffs, she believes. “I don’t dare tell you about the timing. They don’t depend on us everywhere,” Nikitina concluded.

In May 2018, the Central Bank presented the concept of the MTPL reform. It provides for three stages of changes, the last one should be completed no earlier than mid-2020.

Vedomosti is awaiting comments from the Ministry of Finance.

The Central Bank did not approve the merger of compulsory motor liability insurance and comprehensive insurance