The Russian Central Bank's Board of Directors has approved the granting of a financial guarantee of RUB 49.7 billion to the Russian National Reinsurance Company (RNRC).
According to the reinsurer's press service, the guarantee provided by the Central Bank to RNRC, its fully-owned reinsuring subsidiary, will ensure a full reinsurance protection for corporate property risks that fall under the international sanctions. Russian insurers who have concluded insurance contracts are facing difficulties in placing those risks on foreign markets. The current size of the RNRC's paid-up capital (RUB 21.3 billion) could not offer the full reinsurance protection for those risks in all cases.
Thus, following the additional financial guarantee from the Central Bank for sanctioned business, the RNRC will be able to increase its own retention above the primary approved level of RUB 2.5 billion/ per concluded contract, which was set by RNRC proceeding from the current amount of the company's capital to the size which provides the full reinsurance protections of sanctioned risks.
"The financial guarantee granted us by the Central Bank offers the opportunity to accept risks in reinsurance above established limits of our own retention. It only refers to the sanctioned business. All other business which we accept in reinsurance will not suffer any changes, in respect of the amount of our retention", stated Nikolay GALUSHIN, President, RNRC.
RNRC was established by the Central Bank of Russia, pursuant to the Parliament law on the mandatory cession for all Russian insurance companies. 10% of every Russian risk transferred to reinsurance should be offered to RNRC. As for the shares in the risks of the companies that are under the international sanctions regime, RNRC must take them for reinsurance in the amount of 10%. RNRC is allowed to undertake all other risks according to its own underwriting policy. Paid-up capital of the company is RUB 21.3 billion. Recently, the Russian Analytical Credit Rating Agency assigned RNRC the AAA (RU) rating with the stable outlook.