The Bank of Russia has proposed changes to the calculation of the local coefficient (LC) used in setting prices for compulsory motor third-party liability insurance (CMTPLI) policies. Under the new proposal, regions with a sustained high risk of misconduct in CMTPLI would see their LC doubled when determining policy prices. The details are outlined in a draft ordinance released by the Bank of Russia for public consultation.
Regions will be identified as high-risk based on their inclusion in a designated zone monitored by the central bank. According to the Monitoring of Regional Misconduct Risks in CMTPLI, the Republic of Ingushetia (since 2019) and Novosibirsk Region (since 2021) are currently classified as such. The Bank of Russia suggests raising the LC for eight territories within these regions.
Between 2023 and 2025, the number of regions marked as high-risk has decreased from twelve to two. Over the past year, both the Republic of Dagestan and Chechen Republic have been removed from this category following efforts by regional authorities.
The Bank also plans to update reference LC values for several regions, reflecting current loss indicators in CMTPLI.
Additionally, proposed changes would expand rate ranges for motorcycles by 40% and for other vehicle categories by 15%. This adjustment is intended to support fair pricing amid increased costs for spare parts and higher CMTPLI payments. The last adjustment to rate ranges for ordinary car drivers occurred in September 2022. Since then, average payments have risen: during the first half of 2025, they increased by 17% compared to the previous year and by 56% compared to the same period in 2022.
Despite these increases, insurers will retain flexibility to offer lower-cost policies to experienced and careful drivers due to more precise rate-setting methods targeting those with higher losses. In the second quarter of 2025, standard motorcycle policies priced at the upper limit accounted for 58% of all such policies issued; among ordinary car drivers, this figure was 29%. By mid-2025, average premiums for ordinary car drivers had fallen by 4%, attributed to accurate rate setting within an expanded range and competition among insurers for low-risk customers.
"The Bank of Russia welcomes any suggestions and comments through 7 September 2025."