/ Go to the mediabankRussian Export Centre logo / Go to the mediabankInternationalIndiaAfricaThe Russian Agency for Export Credit and Investment Insurance (EXIAR), part of the Russian Export Center (REC, part of VEB.RF), will expand its powers for trade credit reinsurance in relation to domestic supplies, the REC said.”The REC group will receive new powers after a draft law proposed by experts from the Russian Ministry of Economic Development and the Russian Export Center on amendments to federal laws concerning the organization of insurance business and on the basis of state regulation of foreign trade activities entering into force,” the report said. According to the authors of the draft law, the need for such amendments is long overdue. Against the background of Western sanctions, Russia is experiencing a shortage of reinsurance capacity. The volume of insurance coverage provided by commercial insurers has begun to shrink. Insufficient insurance coverage could in the long term significantly reduce the ability of Russian producers, suppliers and buyers of goods and services to make widespread use of deferred payments in the domestic market. Suppliers of goods and services have tended to provide deferred payment to buyers with trade credit insurance policies that prevent the risk of non-payment for the goods or services supplied. On the one hand, the insurance contract provided suppliers with a guarantee of payment for deliveries, and on the other, it allowed buyers to avoid prepayment of products and obtain deferred payments without diversion of funds from the turnover. This type of insurance was beneficial to all parties involved in the trade-monetary relationship.EconomyREC Organized Over 200 Business Meetings for Russian Companies in India31 March, 06:39 GMTA shortage of coverage under this type of insurance could lead to a reduction in supplies, a slowdown in payments and an increase in bankruptcies in the real economy. The extension of EXIAR’s domestic reinsurance powers is seen as a temporary support measure in the face of present international restrictive measures. The report notes that amendments to federal laws regulating insurance business and foreign trade activities will allow EXIAR to assume the authority of trade credit reinsurance to increase reinsurance capacity in this type of insurance to support commodity turnover in the Russian domestic market.
- REC: Businesses Will Get Additional Credit Reinsurance Opportunities in Russia