A note from Willis Group Holdings features comments from Ann Longmore, Executive Vice President of Willis’ Executive Risks practice, who analyzes the impact(s) of Russia’s accession to the World Trade Organization as its 156th member earlier this month.
“We expect the WTO’s overriding purpose — to help trade flow as freely as possible – to have a significant impact on Russia’s insurance industry in the long run,” Longmore said in her latest WillisWire blog.
“In the short run, the internal impact of Russia’s accession to the WTO will be moderated by a phased approach,” she points out. “If tariff reductions result in substantial losses for a particular industry, the WTO rules allow the use of special protective measures to limit such imports for a period of between five and seven years. So, stay tuned for more,” she added.
Longmore selected the following as some of the most important aspects affecting Russia’s insurance industry:
— As part of its admission to the WTO, and in spite of opposing internal pressures, Russia will significantly increase its commitments to multinational insurance providers
— Russia had previously restrained the amount of foreign investment in the sector to about 15 percent of total investment; but as part of its accession commitments, has agreed to increase this limit to 50 percent
— It will allow 100 percent foreign ownership of non-life insurance companies
— Russian prohibition of foreign participation in mandatory insurance lines as well as Russian restraints on the number of licenses granted to foreign life insurance firms will be phased out five years after the date of accession
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