LDPR deputies are moving forward with bills to tie OSAGO policies to the driver and to remove the depreciation coefficient, planning to submit these proposals to the State Duma before the year ends, according to Yaroslav Nilov, the deputy head of the faction in the lower house. Nilov spoke with socialbites.ca about the plan.
The core idea being pushed for OSAGO changes is straightforward yet potentially transformative. Vehicle owners would gain the option to bind the OSAGO policy either to the car or to the driver, depending on what makes the most sense in a given situation or the most favorable financial setup. “If a family has several cars and a single driver, why issue OSAGO for every vehicle when a policy for the driver could cover all cars? And conversely, when there is one car with multiple family members who drive it, a car-specific policy might make more sense. In neighboring countries, you can already find driver-based OSAGO in some cases,” Nilov explained. In addition, he noted that the same package will prepare a law to remove the depreciation factor from OSAGO indemnities. The argument is that depreciation hurts former car owners who receive too little compensation, while insurers argue that worn parts justify lower payouts even though newer owners pay more for coverage.
Nilov indicated that draft laws are in preparation and will be offered to deputies for consideration before the New Year, speaking to socialbites.ca in an interview. He also argued that the current OSAGO framework favors insurers and does not adequately protect drivers. He claimed that insurance companies seek ways to avoid paying out for accidents and often try not to recognize accidents as insured events. According to the deputy, insurers weigh costs: whether it is cheaper to repair a vehicle or to pay a smaller sum directly to the driver for self-repair, and they wager on how to minimize payments.
“Insurance companies complain about losses but remain in the market. If they complain, they should leave the market,” Nilov argued. He predicted that only two or three large firms would eventually dominate the landscape, while smaller players would cease operations, bringing more order to the sector.
A separate discussion on where OSAGO funds actually go drew attention last week. Lawmakers from another faction, A Just Russia – For Truth, asked the Attorney General’s Office to check how insurers manage unused money intended for damage coverage in OSAGO cases, as reported by Izvestia. Federal law states that 77% of OSAGO funds should be directed toward driver and vehicle compensation, yet insurers have historically paid out only about 59–62% of collected funds over time. Lawmakers questioned where excess profits from policy sales went and why those funds were not used to offset rising payment costs, especially after tariff increases in 2022. The party suggested that fines and legal costs could be paid from these sums, noting that insurers claim profits for policy administration while keeping a portion of funds for other purposes.
Sergey Mironov, the head of Just Russia – For Truth, told socialbites.ca that the question remains whether prosecutors will respond to the party’s appeal within the legally mandated one-month period to review the matter and decide whether intervention is warranted. He added that regional multipliers and the power factor in car valuations should be reconsidered. Mironov recalled that OSAGO legislation was crafted nearly two decades ago, when cars typically produced around 200 horsepower. Today’s typical vehicles are largely mid-range sedans, he pointed out. He also argued that there is no need to raise tariffs because the OSAGO system holds substantial internal reserves worth tens of billions of rubles.
Responses from the Central Bank to the deputies’ OSAGO critiques were not immediately available, while insurers argued against comparing annual OSAGO fees with actual payouts as a measure of system effectiveness or driver compensation. The Russian Association of Motor Insurers (RSA) noted that payments under OSAGO contracts do not always align with “on-time wages,” explaining that an insured event can happen any time during the policy term and that the payout process takes time. They also noted that average payouts can rise notably from quarter to quarter and recommended using a moving combined loss ratio to measure true loss exposure, when assessing the system’s performance. This nuanced view highlights the distinction between timing and real value for drivers and insurers alike.
The Liberal Democratic Party’s OSAGO proposal has drawn a mixed reaction. Anton Shaparin, vice president of the National Automobile Association (NAS), suggested that licensing the policy to a driver or a vehicle could help save money, but implementation would be challenging and would likely face stiff insurer opposition. He argued that a more flexible, customer-oriented OSAGO model would require insurers to adapt their practices, but the current system does not easily accommodate such changes. Shaparin also criticized the depreciation coefficient, noting that repairs funded under OSAGO are often paid in cash, and the new methodology being explored by the Central Bank could allow the use of cheaper Chinese parts that can be up to 80% cheaper than catalog parts. He warned that overly strict depreciation rules can deprive drivers of fair compensation and even lead to situations where compensation becomes a mere token gesture rather than real repair funding.
This year saw two tariff increases, one in January and another in September. Serhiy Radko, a lawyer for the Freedom of Choice movement, warned that the trend of rising OSAGO costs may persist. He pointed to ongoing problems with spare parts supply and logistics and suggested that a normalization of tariffs might take longer than expected, potentially keeping costs high for longer than anticipated. In the view of Radko and others, the actual price drivers pay has jumped far beyond official tariff adjustments. A resident of Surgut reported that insurance for a VW Golf with 140 horsepower rose to about 24,000 rubles for a year, up from roughly 15,000 rubles a year ago once the personal coefficient is included.
Overall, the OSAGO landscape in Russia remains contested. Proponents say policy linking could boost efficiency and fairness, while critics warn about practical hurdles and the risk of undermining contract clarity. The debate continues as lawmakers seek a path that better aligns payments with actual costs, while keeping drivers protected and insurance markets competitive. — socialbites.ca
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