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. Last Updated: 07/27/2016

Duma Votes to Ease Entry of European Insurers

The State Duma passed in a second reading Tuesday legal amendments designed to ease prohibitions on European firms' access to the insurance market.

The amendments concern only European insurers and are based on a 1994 agreement with the European Union, which the Duma ratified in 1996.

"The adoption of the amendments cannot be postponed. If Russia does not fulfil its obligation, then the EU will have the right not to fulfil other obligations towards Russia which are now being prepared," Finance Minister Alexei Kudrin told the Duma.

The issue of freeing foreign insurers' access to Russia's market is one of the main stumbling blocks in Russia's entry negotiations with the WTO.

The amendments would allow foreign firms to own up to 25 percent of the overall capital of local insurance companies, up from 15 percent. Currently, foreign firms account for just 4 percent of the capital of all insurers in Russia The amendments also would allow firms with foreign ownership to offer life insurance.

Alexander Koval, Duma deputy and head of the All-Russia Insurers' Union, said local insurers did not support the idea of giving European firms greater access to the Russian market. "The adoption of the amendments will lead to foreign insurers' dominance on the local market," he said.