What threatens mega insurers

Supervision of the insurance market will survive the reorganization. The President decided to create a single financial services, which provide control over Russia's insurance and investment companies. "At the present time to determine the form of association in the form of accession to the Federal Financial Markets Service of insurance supervision. Terms of matching positions of principle are met, before February 1, approved a procedure for informing, "- said the head of the Federal Service for Insurance Supervision (FSIS), Alexander Koval, speaking last week at a conference on insurance, organized by the Adam Smith Institute. According to him, the decree on the establishment of mega financial market may appear a few days ago. "The order, purpose and structure of a block of insurance supervision in the new service will be determined by decree of the Government", - he explained. The possibility of combining the two agencies discussed for several months. The stumbling block was the question of what kind of supervisory service is the foundation for a single regulator. Initially it was proposed to abolish the FFMS and build a mega-regulator based on the FSIS. Then plans changed. Dmitry Medvedev has put an end to the dispute, giving priority to the Office of Vladimir Milovidov. True, the government has yet to decide what powers to give the new service, whether it could issue regulatory documents. Now not only the Federal Financial Markets Service oversees the market participants, but also prepares regulations. Do not Rosstrakhnadzor such authority, the rules in the insurance field specifies the Finance Ministry. The question is whether to consolidate a unified service standard setting initiative or be forwarded to the Finance Ministry. The answer to it in the end depends on the status created by the supervisory authority. Around the bank of the bar. The idea of ​​a mega-regulator in Russia is not new. One of the first voiced by former head of the Federal Financial Markets Service Oleg Vyugin. Back in 2004, he proposed to unite not only the regulation of insurance and capital markets, and banking supervision, separating it from the Central Bank. The need to create mega, according to proponents of this idea was prompted by many factors. By that time, Russia has already developed large financial group, which included banks, insurance, brokerage, leasing and management companies. Within these conglomerates there was a steady flow of funds, as they were regulated by different authorities, which are not adequately coordinate their activities. Even the banking products become more complex. However, this idea has caused severe criticism then. Do not understand and she met with leaders of the Central Bank. On the mega financial markets are back in the midst of a crisis in 2008. The problem of supervision discussed in many countries. In the circle of financiers expressed the opinion that the crisis could be prevented by more stringent measures of supervision, strict regulation of structured products markets and greater transparency tools that are out of balance sheets of banks. Problems arose due to the fact that the unregulated part of the financial system, banks are not subject to review by regulators. For example, for the banks' balance sheets were securitization of mortgage transactions. The U.S. Treasury at the end of 2008 even addressed the issue of restructuring the banking supervision and to expand the powers of the Federal Reserve System (FRS). According to experts, the number of countries - supporters of the integrated management of the financial markets is growing. Mega today there are more than 50 countries. Most often, however, this model is based on banking supervision - is its main core. We have Federal financial service is created only on the basis of two agencies - Federal Financial Markets Service and FSIS. According to analysts, this severely limits its possibilities. "I think the time for detailed comments on this topic has not come yet, because it is not known in what format will create a mega-regulator. In any case, to make it truly "mega", it is necessary to provide a holistic control of the insurance, stock markets, including asset management, pension funds and banks. "Such a regulator should monitor the solvency, reporting, reserves, capital adequacy and transparency of market participants to investors, customers, and insured to protect the rights of the latter in the short and long term," - said General Director of "Rosno," the head of Allianz Eurasia Hannes Chopra. According to him, there are different ways of creating such a regulator. "If the basic functions and people in the new structure will remain the same and simply will move under one roof, then I would not expect significant changes. Although the "devil", as they say, it was "in the details." Insurance market as a whole is now insufficiently regulated and controlled, it needs special attention from the government, the determination to change the situation "- he adds. True, it is possible that the current union - only the first step on a long journey. As mentioned earlier Milovidov Vladimir Milovidov, the union will be "flexible to the creation of mega traffic in Russia." However, it is possible that it's much easier, but the main reason for unification is limited to financial problems. According to some experts, the merger of the two supervisory authorities is derived from hopelessness. Rosstrakhnadzor simply not enough resources to monitor every insurance company. This requires a staff of skilled employees, high wages, the cost of IT-technologies. And the creation of a single regulator will help resolve these issues and, ultimately, save budgetary funds. Is it advisable to minimize this - a moot point. After saving effect is difficult to predict. The regulator and the non-payment crisis. The main question is how the reorganization will affect supervision in the insurance market that is experiencing hard times and suffer from it themselves whether insurers? According to head of FISA, the project has its pluses and minuses. On the one hand, the association will help to better control the transparency and quality of the assets of insurers. And this is today - the Achilles' heel of the Russian insurance. It is the poor quality of assets may lead to the collapse of the company. As told from the podium Insurance Forum Alexander Koval, inspection, FSIS initiated jointly with the Bank of Russia in the first half of 2010, prompted insurance companies to transfer funds from bank bills in the category of "other assets". "Out of 100% of bank notes in this category passed 24% of the securities. These actions indicate a lack of reliability of the securities in which insurance companies often place their reserves and own funds ", - commented the head of Rosstrakhnadzor. He believes that by combining the efforts of two agencies, it will be easier to control the structure and quality of assets, and hence the solvency of insurers. In addition, consolidated supervision will be easier to exercise control over the financial group, which includes insurers. In December, FSIS published a review on the analysis of financial statements of insurers, which addressed the high level of indirect dependence on the mother's insurance and holding companies. "A selective analysis of the assets taken to cover insurance reserves and own funds of some of the largest insurers, has shown that investments in assets associated with the insurer organizations make them 20-40% of the total value of own funds and insurance reserves" - the document said. Joint efforts of the two agencies will be to control the relationship with affiliates of insurers. However, the obvious and cons. According to Alexander Koval, reforming oversight would require a significant number of changes in legislation on insurance and to legislate on the financial market. It is clear that the reform process will not be easy, it could take all year, and maybe more. The head of FSIS said that any reform at the organizational stage poses a challenge: "The service of supervision will be many additional worries. I do not rule out that in this period, insurance companies, which focus on the "schematic business," will "blush on the cheeks. '" He even warned of a possible crisis of non-payment by insurers. "There may be a slow post-crisis effect. This leads to a decrease in financial stability of the insurance community. Trust in insurers, respectively, from customers, to put it mildly, not growing, "- he said. The fog of the future. How will the control of the market during the period of reorganization and plans that will be with FSIS, is unclear. This year, the department planned to focus on the verification of the financial statements of insurers, from February - March was supposed to use for this purpose developed a risk-oriented agency model evaluation. It was also proposed to introduce a new reporting system in electronic form at the end of last year, this system was successful "run-in." The next step adoption of a number of regulations governing the activities of insurers. Already produced three of the four documents governing the bankruptcy of insurers and the introduction of an interim administration in the companies. The agreement with the Ministry of Finance to amend the orders of the reserves and assets of insurance companies, which, according to Alexander Koval, from July 1 to come into force. Who will control the execution of orders? A separate question - preparation for the introduction in 2012 of compulsory insurance of liability of owners of dangerous objects. "We see the problem - to prevent the distribution of licenses for this type of insurance like hotcakes," stated Alexander Koval. Such a policy in the law on compulsory motor TPL insurance, he said, "facilitated" the Compensation Fund for 9-10 billion. These funds paid for the obligations of RSA unscrupulous market participants. On what the rules will be established this year, depends on the implementation of the project. According to Andrew St. George, president of the National Union of Insurers of liability (further JISC), will soon be prepared by a number of documents regulating the activities of insurers in the new field. "Creating a mega-regulator - the right step. But it is clear that the reorganization will complicate the coordination of documents, "- he said. "The main thing - do not assume that all efforts made to improve the quality of the market the last 18 months (cleaning of the market, raising the minimum statutory capital requirements and solvency, etc.)," ​​lost "in the enlarged regulatory body, to urge for change not diminished and the focus was not lost, "- says Mr. Hannes Chopra.