Russian Central Bank Proposes 14-Day Cooling-Off for OSAGO Data Verification

The Regulator’s Proposal: 14 Days to Verify OSAGO Data

The Bank of Russia has sent proposals to the Russian Union of Auto Insurers (RSA) that would introduce a 14-day “cooling-off” period for mandatory motor third-party liability (OSAGO) policies. During that window, insurers would be required to verify the accuracy of data provided by the policyholder—such as vehicle use, engine capacity, driver age and experience. If false information is discovered, the insurer could cancel the contract immediately and return the premium, minus administrative expenses of around 22%.

After the two weeks expire, however, the insurer would lose the right to unilaterally cancel the policy and would be forced to go to court to terminate the agreement. The proposals, confirmed by two insurance market sources and acknowledged by both the Central Bank and the RSA, aim to protect car owners from what consumer advocates say is an unfair practice: insurers cancelling policies over minor inaccuracies after the contract is already in force and retaining the entire premium.

Currently, insurers can refuse a contract at any stage before a claim occurs, without any refund. The reforms, still at the discussion stage, would also maintain the insurer’s obligation to pay out if a claim happens before the cooling-off ends or before a cancellation, after which the insurer could seek recourse from the policyholder. In 2025, the OSAGO market collected 330 billion roubles in premiums from 40 million electronic contracts and 14.5 million paper ones, with payouts reaching 221 billion roubles.

What the Shift Means for Insurers and Car Owners in Russia

The Central Bank’s Dual Objective

The regulator’s initiative is explicitly aimed at improving data quality in the Motor Insurance Information System (AIS OSAGO) and at curbing opportunistic behaviour by insurers. The Central Bank wants to force companies to check client data more thoroughly at the point of sale, while removing what consumer groups call a “portfolio-cleansing” tool that allows insurers to cancel contracts and keep the premium for formal inaccuracies discovered later.

Insurers Face Higher Costs and a Shift to Judicial Disputes

For insurance companies, the proposal cuts off the current low-cost path of unilateral, non-judicial cancellation. After the cooling-off period, every attempt to cancel a suspected fraudulent policy would require litigation, sharply raising operational and legal expenses. One market expert, Andrey Barkhota, estimated that per-company court costs could rise by 20–30%, adding hundreds of millions of roubles. RSA representatives also warn that capping the verification window effectively gives dishonest policyholders an incentive: if they can hide inaccuracies for two weeks, they risk losing only a small part of the premium even if later caught, because the insurer cannot easily exit the contract.

Consumer Protections Expand, But Fraud May Follow

Car owners gain a clear new right: after 14 days, their OSAGO coverage cannot be cancelled except through a court decision, which is far less frequent than the current arbitrary cancellations. However, the flip side could be higher operating costs for insurers that eventually feed into premiums, especially in high-risk segments like taxi insurance, where underreporting of commercial use is already widespread. ROSGOSSTRAKH’s director of OSAGO methodology, Yegor Svetlov, noted that the taxi segment has persistently tried to pass vehicles off as private-use, a practice the new cooling-off might indirectly encourage if checks are not robust enough within the initial fortnight.

A Balance of Interests in the Draft Phase

The proposal is still a set of theses for discussion within RSA committees, with both insurers and the Central Bank actively negotiating the details. Legal experts point out that shifting rejections to the courts could overload an already strained judiciary and turn every post-14-day discovery of false data into a potentially lengthy litigation. The next steps will determine whether the final regulation extends or shortens the cooling-off window, and what precise verification standards insurers must meet.

Key Takeaways for MTPL Insurers and Policyholders

For Insurers

• Review point-of-sale verification: With only 14 days to uncover inaccurate data, companies must strengthen automated checks on driver age, vehicle purpose and other risk factors at the underwriting stage to avoid being locked into mispriced contracts.
• Prepare for litigation costs: The shift from administrative cancellation to court proceedings could push per-company legal expenses up by 20–30%, according to market estimates, requiring budget and resource planning now.
• Monitor fraud incentives: As RSA representatives indicate, dishonest actors may see the two-week window as a chance to slip through; insurers need to track suspicious patterns and coordinate with the AIS system to flag repeat offenders early.
• Engage in the RSA working groups: The proposal is still under discussion—shaping the precise length of the cooling-off, the definition of “administrative expenses” and the conditions for recourse claims will directly affect operational feasibility.

For Policyholders

• Double-check your application data: During the initial 14 days, insurers may intensify checks. Ensure the declared use (private vs. taxi), engine capacity, and driver details are accurate to avoid a rapid cancellation and partial premium loss.
• Understand the new timeline: Once two weeks pass, your OSAGO policy cannot be cancelled unilaterally by the insurer; you gain stronger protection against arbitrary terminations, but you should still retain your policy documents as evidence.
• Watch for premium changes: If fraud costs rise and legal expenses increase, the market may adjust base tariffs upward. Keep an eye on official tariff changes from the Central Bank once the new rule is adopted.