New Russian Insurance Law
25 November 2004 No.04-010
As you will be aware, the Russian Federal Law # 4015-1 "On the Organization of Insurance Business in the Russian Federation"(the "Insurance Law") was amended by Russian Federal Law # 172-FZ which came into force on 17th January 2004.The amendment added a new Article 4.5 to the Insurance Law that eliminates the exemption that previously existed for mutual insurance societies (including P&I Clubs) from federal regulation and also requires them to obtain licences by July 2005.
A working group of the International Group of P&I Clubs has reviewed the new law and relevant regulations in detail in conjunction with lawyers and other interested parties. The law will only affect those shipowners operating ships that are owned and registered under the Russian registry. Although the Ministry of Finance has confirmed that these owners may still be members of foreign P&I Clubs, it has also pointed out that they should be aware that certain Russian tax rules would apply to the transfer of funds to and from a foreign P&I club.
Although the amended Insurance Law might in theory offer a way in which P&I Clubs could respond to the terms of the revised legislation by obtaining the appropriate licenses, the capital and regulatory requirements involved make it unlikely that any Club will in the foreseeable future be capable of complying with the new legislation.
The All-Russia Union of Shipowners is fully aware of the implications of the amended Insurance Law for your P&I cover and has been actively engaged on behalf of its membership to resolve the problems caused by the amendment. We recommend that you work closely with the Union and any other interested parties in an effort to achieve a solution to the practical consequences of the revised legislation.
A working group of the International Group of P&I Clubs has reviewed the new law and relevant regulations in detail in conjunction with lawyers and other interested parties. The law will only affect those shipowners operating ships that are owned and registered under the Russian registry. Although the Ministry of Finance has confirmed that these owners may still be members of foreign P&I Clubs, it has also pointed out that they should be aware that certain Russian tax rules would apply to the transfer of funds to and from a foreign P&I club.
Although the amended Insurance Law might in theory offer a way in which P&I Clubs could respond to the terms of the revised legislation by obtaining the appropriate licenses, the capital and regulatory requirements involved make it unlikely that any Club will in the foreseeable future be capable of complying with the new legislation.
The All-Russia Union of Shipowners is fully aware of the implications of the amended Insurance Law for your P&I cover and has been actively engaged on behalf of its membership to resolve the problems caused by the amendment. We recommend that you work closely with the Union and any other interested parties in an effort to achieve a solution to the practical consequences of the revised legislation.