Why the Environmental insurance association has been established

Several Russian and international acts first of all the Federal law «On environmental protection», dated January 10, 2002 № 7-FZ, establish basis for development of environmental insurance in the Russian Federation. The experience of realization of provisions of some federal and local laws in the Russian Federation regarding compensation of environmental injury, granting financial security to cover environmental damage, such as the Federal law «On industrial safety of dangerous industrial objects», dated July 21, 1997 № 116-FZ, the Federal law «On space activity», dated November 29, 1996г. № 147-FZ, the Federal law «The code of trading navigation of the Russian Federation» dated April 30, 1999г. № 81-FZ and the others, indicates that environmental insurance is the most universal and perspective financial instrument of warranting of compensation of injury to the environment.

Development of the Russian legislation in this direction is also confirmed by the international practice. From the end of 70th the special system of insurance of environmental risks acts in the USA and the countries of the European Union. There is a developed legislation, effective system of the legal and judicial responsibility for infringements in sphere of protection of the environment. At this time, the U.S. has financial assurance regulations associated with several of its most important federal environmental laws. Financial assurance is required under the «Oil Pollution Act», the «Comprehensive Environmental Response, Compensation, and Liability Act», the «Resource Conservation and Recovery Act», and several other federal statutes. In 2004 with a view of further development of the environmental legislation of the European union Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage was adopted. The main objective of the Directive is to impose financial liability on operator, whose occupational activity endanger environment. As set out, before April 2010 the European Commission shall consider availability at reasonable cost of insurance and other types of financial security for the activities covered by Directive and decide upon adoption of mandatory financial assurance system for certain types of occupational activity. As a rule insurance is considered as the most available and convenient form.

In Finland, the «Environmental Damage Insurance Act» came into force on 1 January 1999. The objective is to guarantee full compensation for environmental damages, including orphaned liabilities. The statute contains the mechanism to underwrite liabilities for which there is no identifiable or solvent liable party. It establishes a compensation fund, run by commercial insurance companies and financed out of compulsory insurance premiums paid by companies whose activities are subject to an environmental operating permit.

The environmental insurance is developing in the CIS countries. In 2003 the Inter-parliamentary Assembly of the CIS countries had adopted the modeling law «On environmental insurance». The law of the Azerbaijan Republic «On environmental insurance,» passed in 2002, had come into force in 2004. In 2005 in Republic Kazakhstan was adopted the law «On mandatory environmental insurance».

The pronounced tendency in the international environmental legislation is that so-called traditional damage — personal injury and damage to goods and property, will be dealt with under national civil liability legislation. The environmental laws only deal with damage to the wider environment. The most famous U.S. environmental law is the Comprehensive Environmental Response, Compensation, and Liability Act or CERCLA, does not cover personal injury or property damage. Although its requirements can help plaintiffs in common law actions. The Directive 2004/35/CE on environmental liability with regard to the prevention and remedying of environmental damage does not provide the right of physical and legal persons to indemnification of damage. The Directive aims to prevent and eliminate environmental damages. In case of the damage to physical and legal persons, their health and property caused by environmental damage they may claim for compensation of damages under the national civil legislation.

The realization of requirements of several environmental acts shows that at this time the special insurance protection system of natural resources is not available on the Russian insurance market. The compensation for environmental damages is paid out under indemnity limits of one policy. According to rules of insurance the compensation for environmental damages is paid out in last turn. Therefore if an event occurs there is a competition of claims for compensation for environmental damage with claims for compensation for personal injury and damage to goods and property. In view of the insignificance of the sum assured under contracts of obligatory insurance, as a rule, insurance payments are paid out for compensation for personal injury and damage to goods and property of the third parties. Actually environmental objects drop out of insurance protection.

All this indicates that there is necessity of special system of insurance of environmental risks in the Russian Federation. The Environmental insurance association ENIA is a nonprofit association dedicated at initiating the active development of such system. It was established by 20 Russian insurance companies.

The main missions of Association in the field of development of environmental insurance are:

To work out legal, scientific and methodical maintenance of various types of environmental insurance;
To develop educational and training programs of experts in the field of environmental insurance;
To create data base on insured objects, to supply its members with analytical information on insurance market;
To participate in developing of programs on environmental insurance of federal and municipal objects together with federal and local enforcement authorities;
To create the legal basis of mechanism to underwrite liabilities for which there is no identifiable or solvent liable party;
and the others.

	Ассоциация экологического страхования	Рус
Ассоциация Деятельность Документы и материалы Публикации Международное сотрудничество Обучение Новости Вопросы и ответы Контакты	Why the Environmental insurance association has been established Several Russian and international acts first of all the Federal law «On environmental protection», dated January 10, 2002 № 7-FZ, establish basis for development of environmental insurance in the Russian Federation. The experience of realization of provisions of some federal and local laws in the Russian Federation regarding compensation of environmental injury, granting financial security to cover environmental damage, such as the Federal law «On industrial safety of dangerous industrial objects», dated July 21, 1997 № 116-FZ, the Federal law «On space activity», dated November 29, 1996г. № 147-FZ, the Federal law «The code of trading navigation of the Russian Federation» dated April 30, 1999г. № 81-FZ and the others, indicates that environmental insurance is the most universal and perspective financial instrument of warranting of compensation of injury to the environment. Development of the Russian legislation in this direction is also confirmed by the international practice. From the end of 70th the special system of insurance of environmental risks acts in the USA and the countries of the European Union. There is a developed legislation, effective system of the legal and judicial responsibility for infringements in sphere of protection of the environment. At this time, the U.S. has financial assurance regulations associated with several of its most important federal environmental laws. Financial assurance is required under the «Oil Pollution Act», the «Comprehensive Environmental Response, Compensation, and Liability Act», the «Resource Conservation and Recovery Act», and several other federal statutes. In 2004 with a view of further development of the environmental legislation of the European union Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage was adopted. The main objective of the Directive is to impose financial liability on operator, whose occupational activity endanger environment. As set out, before April 2010 the European Commission shall consider availability at reasonable cost of insurance and other types of financial security for the activities covered by Directive and decide upon adoption of mandatory financial assurance system for certain types of occupational activity. As a rule insurance is considered as the most available and convenient form. In Finland, the «Environmental Damage Insurance Act» came into force on 1 January 1999. The objective is to guarantee full compensation for environmental damages, including orphaned liabilities. The statute contains the mechanism to underwrite liabilities for which there is no identifiable or solvent liable party. It establishes a compensation fund, run by commercial insurance companies and financed out of compulsory insurance premiums paid by companies whose activities are subject to an environmental operating permit. The environmental insurance is developing in the CIS countries. In 2003 the Inter-parliamentary Assembly of the CIS countries had adopted the modeling law «On environmental insurance». The law of the Azerbaijan Republic «On environmental insurance,» passed in 2002, had come into force in 2004. In 2005 in Republic Kazakhstan was adopted the law «On mandatory environmental insurance». The pronounced tendency in the international environmental legislation is that so-called traditional damage — personal injury and damage to goods and property, will be dealt with under national civil liability legislation. The environmental laws only deal with damage to the wider environment. The most famous U.S. environmental law is the Comprehensive Environmental Response, Compensation, and Liability Act or CERCLA, does not cover personal injury or property damage. Although its requirements can help plaintiffs in common law actions. The Directive 2004/35/CE on environmental liability with regard to the prevention and remedying of environmental damage does not provide the right of physical and legal persons to indemnification of damage. The Directive aims to prevent and eliminate environmental damages. In case of the damage to physical and legal persons, their health and property caused by environmental damage they may claim for compensation of damages under the national civil legislation. The realization of requirements of several environmental acts shows that at this time the special insurance protection system of natural resources is not available on the Russian insurance market. The compensation for environmental damages is paid out under indemnity limits of one policy. According to rules of insurance the compensation for environmental damages is paid out in last turn. Therefore if an event occurs there is a competition of claims for compensation for environmental damage with claims for compensation for personal injury and damage to goods and property. In view of the insignificance of the sum assured under contracts of obligatory insurance, as a rule, insurance payments are paid out for compensation for personal injury and damage to goods and property of the third parties. Actually environmental objects drop out of insurance protection. All this indicates that there is necessity of special system of insurance of environmental risks in the Russian Federation. The Environmental insurance association ENIA is a nonprofit association dedicated at initiating the active development of such system. It was established by 20 Russian insurance companies. The main missions of Association in the field of development of environmental insurance are: To work out legal, scientific and methodical maintenance of various types of environmental insurance; To develop educational and training programs of experts in the field of environmental insurance; To create data base on insured objects, to supply its members with analytical information on insurance market; To participate in developing of programs on environmental insurance of federal and municipal objects together with federal and local enforcement authorities; To create the legal basis of mechanism to underwrite liabilities for which there is no identifiable or solvent liable party; and the others.