The Eurasian Economic Commission (EEC) is working on establishing a common reinsurance capacity within the Eurasian Economic Union (EAEU). The expected result is removal of restrictions caused by the fact that national insurance companies conclude reinsurance contracts with reinsurers from the other member-states.
EEC representatives announced this strategy during the 11th meeting of the Interstate Coordination Council of the Heads of Insurance Supervision agencies in CIS member-states, held on 6-7 April, 2017 in Moscow. Among the participants of the meeting, there were representatives of the EAEU insurance supervision agencies, CIS Executive Committee, CIS Finance and Banking Council, professional insurance associations from the member-states of Interstate Coordination Council.
Some hot topics in insurance industry were discussed, in particular the today’s situation in insurance supervision and regulation, promotion of reinsurance, developing mandatory car insurance, e-paperwork practices in the field of insurance of civil liability of car owners, measures to protect from the cross-border fraud, compiling an insurance terms glossary of CIS member-states.
One of the vital topics was granting to reinsurance companies from CIS the same scope of opportunities as those available for national companies.
As EEC representatives noted, complete lack of discrimination in accessing the insurance markets for EAEU insurance companies will become possible after mutual recognition of licenses. This is a prerequisite for the common financial market to function.
Creating a common reinsurance capacity within EAEU will contribute to synergy effect, increase the volume of EAEU reinsurance market and reduce the reinsurance premium forwarded from the member-states to reinsurers from other countries.
EEC representatives informed the members of the Council about the work being carried out by the Commission in the field of insurance. EEC has prepared a set of documents which includes: draft Agreement on Harmonization of EAEU member states legislation in the field of financial markets, the Plan on Harmonization of EAEU member states legislation in the field of financial markets. EEC is also working on preparing the Concept of Establishing a common finance market of EAEU member-states.
The Harmonization Agreement defines major vectors and procedures for harmonization of EAEU member-states legislation in the field of financial markets. The Harmonization Plan is actually to become a ‘roadmap’ for the process of approximation of standards and regulations stipulated by the national legislation of EAEU member countries in banking and finance industry, in the securities market. The document will be adopted after the Harmonization Agreement is signed. Specific requirements to operations carried out on EAEU financial markets will be revised, so that the remaining differences would not become an obstacle for the effective functioning of a common financial market.
It was decided to set a Work Group in charge of reinsurance under the Interstate Coordination Council. The core competencies of the Work Group will include promoting the development of reinsurance market and removing barriers for cross-border reinsurance in EAEU. Representatives of EEC and CIS Finance and Banking Council will be the participants of the Group.
The Interstate Coordination Council of the Heads of Insurance Supervision Agencies in CIS member-states was established on June 3, 2005 based on the Resolution of the Council of CIS State Leaders. This organization is in charge of inter-industry cooperation in insurance within CIS.
The major goals of the Interstate Coordination Council are implementation of resolutions taken by the Council of CIS State Leaders, taking measures for harmonization of insurance legislation, expanding interaction and mutual assistance, facilitation in establishing mutually beneficial relations between the CIS insurance companies.