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. Last Updated: 07/27/2016

Insurance Reform May Lighten Traffic

MTThe new rules would allow on-the-spot settlements of accidents where the damage is under 25,000 rubles ($1,000).
The State Duma is set to pass a bill on Friday that could simplify the process of completing insurance claims for car accidents, a move that would cut down traffic snarls caused by fender-bender victims waiting for police to complete on-site reports.

Amendments to existing regulations on motor-vehicle insurance would reduce time spent processing claims by allowing victims of road mishaps to claim damages from their own insurance companies. Under existing legislation, motorists involved in accidents have to apply to the guilty party's insurer for settlement in a routine that can result in months of evaluations.

The new rules will also allow settlement of minor road mishaps to be carried out on the spot, without involving the traffic police in cases where damage is worth less than 25,000 rubles ($1,000).

The changes would greatly reduce the workload of the traffic police, said Alexander Maloletnogo, an insurance specialist with Expert-RA rating agency.

Maloletnogo added, however, that the system could also generate corruption by people seeking to make money by faking road accidents and filing false claims.

"An increase in the incidence of fake accidents could also lead to many insurance companies winding up, especially in the regions, where 25,000 rubles is a hefty sum," Maloletnogo said.

The reform will also usher Russia into the International Motor Insurance Card System, enabling Russian insurers to issue Green Cards, which offer coverage in all of the 44 member states of the organization.

Membership in the Green Card system would also make cross-border motor travel simpler.

"The move will boost cross-border travel, as Russian motorists would no longer need to obtain insurance cover at every European country they visit," said Dmitry Markarov, first deputy general director of state insurer Rosgosstrakh.