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Draft law on shared life insurance has been developed in Russia

The Ministry of Finance of the Russian Federation has developed a draft law that provides for the introduction of a new type of insurance with an investment component in the Russian insurance market, shared life insurance (SLI). The corresponding document is published on the portal of draft regulations, according to Forbes.ru.
Draft law on shared life insurance has been developed in Russia

SLI implies the provision of insurance protection, as well as the opportunity to invest part of the paid insurance premium in selected assets and receive investment return. “Unlike the existing types of long-term life insurance as endowment and investment life insurance, SLI allows invest in a wide range of assets. This can potentially provide greater profitability and makes SLI an economically more attractive instrument,” the press service of the Ministry of Finance explained.

To conclude such an agreement, the insurer must obtain a license to carry out voluntary life insurance, as well as license to manage investment funds, mutual investment funds and non-state pension funds, the press service specified. The adoption of this bill, as the Ministry of Finance expects, will contribute to the development of the voluntary life insurance segment, expansion of tools for investment and savings, as well as development of competition in the financial market.

The Central Bank announced plans to launch shared life insurance last summer. It sent out letters to insurance companies, the Ministry of Finance and National Association of Securities Market Participants announcing the launch of SLI starting from the 4th Q 2022. The Bank of Russia considered similar plans as far back as 2017.

As intended by the Bank of Russia, SLI will be available only to qualified investors and will add to the line of insurance investment policies, including investment life insurance (ILI) and endowment life insurance (ULI). However, in case with SLI, the investor faces a higher risk. Such insurance type will work like a European Unit-Linked insurance policy, a person buys a long-term life insurance policy, and this money is invested in various assets, usually through investment funds.

Source: https://www.forbes.ru/finansy/469281-minfin-razrabotal-zakonoproekt-o-dolevom-strahovanii-zizni

Photos are from open sources.

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