With about RUB 988bn (USD 26bn) in grosspremium written, in 2014, the Russian insurance industryranked 27th in the world. Non-life insurance premiumaccounted for 89 percent of GPW while life insurance foronly 11 percent. In 2015, the industry also faced with theconsequences of the Western economic sanctions whicheffectively closed access to the high quality Westernreinsurance capacity for the Russian insurers that providecoverage for 1500 large Russian companies which were put onthe sanctions list. In the past, the Western reinsurersprovided over 80 percent of reinsurance capacity for suchrisks. In the case of Russia, the main objective ofinsurance supervision is to ensure that insurers fullycomply with core regulatory norms fixed by the law in thefollowing four areas of insurance operations: (a) solvency(capital adequacy); (b) insurance reserves; (c) assetscovering own funds; and (d) assets covering reserves. Theobjective of off-site and onsite supervision is restrictedto ensuring compliance of insurers with these fourregulatory norms. In this context, the resources of theinsurance supervisor are by and large dedicated towardsmeeting this objective. While the dispersion of insurancesupervisory functions among numerous CBR departments withvarious reporting lines carries certain advantages (such asa reduced potential for the conflict of interest), it alsohas a potential for major drawbacks. These include thepotential for (a) insufficient coordination among differentdepartments, (b) shortage of necessary insurance expertisewithin departments universally dealing with a wide range offinancial services, and (c) impaired ability of theregulator as a whole to systematically detect problems withcompliance in such a technically complex industry asinsurance at an early stage.
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