INSTRUCTION OF CENTRAL BANK OF THE RUSSIAN FEDERATION

of January 23, 2018 No. 4695-U

About procedure the Bank of Russia of control of execution of the plan of recovery of solvency of insurance company and about cases of adoption by the Bank of Russia of the decision on conducting exit check of activities of insurance company for analysis results of the plan of recovery of solvency

This Instruction based on item 4 of Article 183.1 and item 4 of article 183.2 of the Federal Law of October 26, 2002 No. 127-FZ "About insolvency (bankruptcy)" (The Russian Federation Code, 2002, No. 43, Art. 4190; 2004, No. 35, Art. 3607; 2005, No. 1, Art. 18, Art. 46; No. 44, Art. 4471; 2006, No. 30, Art. 3292; No. 52, Art. 5497; 2007, No. 7, Art. 834; No. 18, Art. 2117; No. 30, Art. 3754; No. 41, Art. 4845; No. 49, Art. 6079; 2008, No. 30, Art. 3616; No. 49, Art. 5748; 2009, No. 1, Art. 4, Art. 14; No. 18, Art. 2153; No. 29, Art. 3632; No. 51, Art. 6160; No. 52, Art. 6450; 2010, No. 17, Art. 1988; No. 31, Art. 4188, Art. 4196; 2011, No. 1, Art. 41; No. 7, Art. 905; No. 19, Art. 2708; No. 27, Art. 3880; No. 29, Art. 4301; No. 30, Art. 4576; No. 48, Art. 6728; No. 49, Art. 7015, Art. 7024, Art. 7040, Art. 7061, Art. 7068; No. 50, Art. 7351, Art. 7357; 2012, No. 31, Art. 4333; No. 53, Art. 7607, Art. 7619; 2013, No. 23, Art. 2871; No. 26, Art. 3207; No. 27, Art. 3477, Art. 3481; No. 30, Art. 4084; No. 51, Art. 6699; No. 52, Art. 6975, Art. 6984; 2014, No. 11, Art. 1095, Art. 1098; No. 30, Art. 4217; No. 49, Art. 6914; No. 52, Art. 7543; 2015, No. 1, Art. 10, Art. 11, Art. 29, Art. 35; No. 27, Art. 3945, Art. 3958, Art. 3967, Art. 3977; No. 29, Art. 4350, Art. 4355, Art. 4362; 2016, No. 1, Art. 11, Art. 27, Art. 29; No. 23, Art. 3296; No. 26, Art. 3891; No. 27, Art. 4225, Art. 4237, Art. 4293, Art. 4305; 2017, No. 1, Art. 29; No. 18, Art. 2661; No. 25, Art. 3596; No. 31, Art. 4767, Art. 4815; No. 48, Art. 7052; 2018, No. 1, the Art. 54) (further - the Federal Law "About Insolvency (Bankruptcy)") establishes procedure the Bank of Russia of control of execution of the plan of recovery of solvency of insurance company and cases of adoption by the Bank of Russia of the decision on conducting exit check of activities of insurance company for analysis results of the plan of recovery of solvency of insurance company.

Chapter 1. Procedure Bank of Russia of control of execution of the plan of recovery of solvency of insurance company

1.1. Control of execution of the plan of recovery of solvency of insurance company by insurance company (further - PVP) is performed by the Bank of Russia and includes control for:

adherence to deadlines of application of the provided PVP of measures for the prevention of bankruptcy of insurance company (further - measures);

goal achievement of recovery of solvency of insurance company and improvement of financial condition of insurance company;

compliance of the achieved indicators of activities of insurance company to the forecast of the expected results specified in PVP of insurance company.

1.2. Control of execution of PVP is exercised by the Bank of Russia by the following methods.

1.2.1. By assessment of the financial analysis of insurance company containing in PVP, including assessment:

observance by insurance company of requirements of the insurance legislation to ensuring financial stability and solvency;

assets and liabilities of balance of insurance company;

unprofitability of carrying out insurance transactions on types of insurance;

profitability of activities of insurance company;

indicators of the profit and loss statement for the purpose of identification of the factors which exerted impact on emergence of losses, and indicators of the income and expenses of insurance company in two prior years (quarterly);

influences of activities of the affiliated and dependent organizations, branches and representative offices of insurance company on its activities;

ratios of amount of insurance premiums on separate types of insurance in total amount of insurance premiums of insurance company;

forming of insurance reserves on life insurance and insurance to other, than life insurance;

the assignments made by insurance company in professional associations of insurers in accordance with the legislation of the Russian Federation.

1.2.2. By assessment of the provided PVP of measures, terms (including intermediate terms) their application and results expected in connection with their application including assessment of the following measures if they are provided by PVP:

financial assistance of insurance company by her founders (participants) and other persons;

change of structure of assets and structure of liabilities of insurance company;

change of organizational structure of insurance company;

increase in the size of the authorized capital of insurance company and size of its own means (capital);

the organizational actions connected with elimination of the bases for application of measures;

reorganization of insurance company;

change of tariff and investment policy of insurance company;

change of ratio of insurance premiums on types of insurance in total amount of insurance premiums of insurance company;

change of reinsurance policy;

expense reduction, including on debt servicing of insurance company, and expenses on management of insurance company;

transfer of the insurance portfolio of insurance company.

1.2.3. By assessment of the documents attached to PVP confirming reality of execution of the provided PVP of measures including assessment of the following documents if they are attached to PVP:

copies of protocols of general shareholder meetings (participants), meetings of the Board of Directors (supervisory board), collegiate executive body and audit committee of insurance company;

copies of decisions (statements from decisions) and other documents, confirmatory decision of executive body of insurance company;

copies of agreements, contracts, certificates on the property right and other similar documents;

verified copies of balances of legal entities (with mark of tax authority about their acceptance) on two reporting dates preceding date of creation of PVP, and calculation of their net assets or verified copies of certificates of the income of physical persons for the period at least one year as of date of their representation;

administrative acts of assignment of responsibility on officials of insurance company for execution of the provided PVP of measures in full and at the scheduled time;

the conclusions of the actuary confirming justification of insurance rates;

projections of financial, insurance and investing activities of insurance company.

1.2.4. By assessment of PVP represented by insurance company for the purpose of confirmation of execution in the Bank of Russia:

interim statements on execution of the provided PVP of measures (further - the interim statement), the represented not later than 5 working days after completion date of each provided measure PVP, but at least once in two weeks;

the performance report insurance company of the provided PVP of measures (further - the closing statement) represented by insurance company no later than 7 working days after the term of realization of PVP containing results of application of the provided PVP of measures with reflection of changes of financial condition of insurance company for date of creation of the closing statement in comparison with approval date by executive body of the PVP insurance company with application of copies of the documents confirming these changes.

1.3. In cases of discrepancy of PVP and (or) documents confirming reality of execution of PVP, to requirements stipulated in Item 3 articles 183.1 of the Federal law "About Insolvency (Bankruptcy)", and (or) non-presentation of the specified documents the Bank of Russia informs on it insurance company by sending an inquiry within 10 working days from the date of representation of PVP.

The insurance company no later than 10 working days from the date of receipt of the request provided by paragraph one of this Item submits the requested documents and (or) PVP conforming to requirements, stipulated in Item 3 articles 183.1 of the Federal law "About Insolvency (Bankruptcy)" to the Bank of Russia.

1.4. PVP, documents confirming reality of its execution, and also the interim statements and the closing statement approved by executive body of insurance company for the purpose of implementation by the Bank of Russia of control of execution of PVP are represented to the Bank of Russia in the form of the electronic documents signed by the strengthened qualified digital signature according to requirements of the Instruction of the Bank of Russia of November 3, 2017 No. 4600-U "About order of interaction of the Bank of Russia with credit institutions, not credit financial credit institutions and other participants of information exchange when using by them of information resources of the Bank of Russia, including personal account", No. 49605 registered by the Ministry of Justice of the Russian Federation on January 11, 2018 (further - the Instruction of the Bank of Russia No. 4600-U).

1.5. The Bank of Russia notifies insurance company on results of consideration of the closing statement in electronic form signed by the strengthened qualified digital signature according to requirements of the Instruction of the Bank of Russia No. 4600-U within 10 working days from the date of submission of the closing statement to the Bank of Russia.

Chapter 2. Cases of adoption by the Bank of Russia of the decision on conducting exit check of activities of insurance company for PVP analysis results

2.1. The decision on conducting exit check of activities of insurance company for analysis results of PVP is made by the Bank of Russia in the following cases:

factual determinations of unauthenticity of the data included in PVP (including discrepancies between the data containing in PVP and the data containing in the reporting of the insurance company necessary for control and supervision in the field of insurance activity);

need of receipt of the additional information about activities of insurance company for assessment of sufficiency of the provided PVP of measures and reality of execution of the provided PVP of measures.

2.2. Exit inspection of activities of insurance company is carried out according to the Instruction of the Bank of Russia of April 24, 2014 No. 151-I "About procedure for conducting checks of activities of not credit financial credit institutions and self-regulatory organizations of not credit financial credit institutions by authorized representatives of the Central bank of the Russian Federation (Bank of Russia)", registered by the Ministry of Justice of the Russian Federation on July 11, 2014 No. 33058, on July 21, 2015 No. 38111, on August 4, 2016 No. 43118, on June 14, 2017 No. 47032, on October 18, 2017 No. 48591, within 30 working days from the date of receipt by the Bank of Russia of PVP.

Chapter 3. Final provisions

3.1. This Instruction becomes effective after 10 days after day of its official publication.

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