Modern trends and prospects of the pro-rata regulation in the insurance market of Russia
Subject. The article discusses the possibility of the pro-rata regulation in the Russian insurance market. Objectives. The study is to evaluate whether the insurance market is prepared for recently approved capital adequacy requirements and how they influence the general financial sustainability. Based on the information and the international use of the risk-based approach, including Solvency II, I assess whether the pro-rata regulation is feasible as a means of corporate financial sustainability, preserving the diversification of requirements by size, specialization and risks taken. Methods. Research employs general scientific methods of the systems and comparative analyses, synthesis, analogy, comparison and classification. I apply tools of the economic and statistical analysis, including the correlation analysis. Conclusions and Relevance. The insurance market was found to considerably meet the capital adequacy requirements. However, considering a growing market concentration, the sector needs to remain competitive, protecting regional companies demonstrating the financial sustainability and healthy microeconomics. Comparing local practices with the best global ones, I believe it is possible and necessary to integrate the pro-rata rule and outline new requirements to risk quantification and assessment, which will underlie the assessment of capital adequacy. The findings can be admitted and adapted by the Central Bank of Russia to introduce the risk-based approach as effectively as possible with reference to international standards and national interests of the insurance market.