Notes that follow the

According to data issued by the Finance Ministry, there are around 1, 300 insurance companies currently operating on the Russian market. The total volume of money paid for insurance in 1999 was 2.3 times greater than in 1998. A very important contribution to the insurance industry was the decree President Yeltsin signed in 1997. The decree made it mandatory for all people travelling abroad to have insurance in case they had health problems or encountered various other incidents while on their trip. Also, many countries in Europe, as well as the US and Japan, require! Russian tourists to have an insurance policy.

Though these regulations have been in place since 1997, everyone knows that all domestic transport providers — from long-distance buses to airplanes - are obliged to purchase insurance to protect their passengers on routes that take the travellers more than 50 kilometers from the city of departure. In case of an accident, the insurance company has to pay compensation to the passengers who have suffered.

However, this mandatory insurance doesn't involve huge compensation packages - no matter what happens, the amount of the insurance company is required to pay out to each passenger cannot exceed 120 minimum wages.

Compared to travel-insurance policies in the West, which cover anything from suitcase damage to medical evacuation by airlift, Russian travel insurance firms offer only a narrow set of services to clients going abroad. The problem is the local mentality. Russians don't like to think about what may happen in the future, and many people buy insurance just because it's required by law. The insurance culture in Russia in still quite underdeveloped.

In comparison to many other insurance firms, East European Insurance Co. has a relatively ample array of policies - at least for a Russian insured. Besides standard medical insurance, EEIC sells a policy that will cover the costs of bringing children back to Russia if something happens to the parents while they are travelling together. If the tourist intends to travel by car, EEIC offers car-repair insurance, and the policy covers the passengers' return to Russia if the car breaks down for good. Also, the car policy covers legal fees up to 5, 000 dollars if there's a car accident and the person has to go to court.

American insurer AIG (American Insurance Group), which has been operating on the Russian market since 1995, besides medical insurance for tourists, also offers life insurance, personal and third-party liability insurance and luggage insurance - a package akin to those commonly offered in the West.

One of the largest Russian insurance companies, Pro-myshlenno-Strakhovaya Kompaniya, caps compensation for lost or stolen luggage at $500, though it offers to help find documents - such as passports - in case of their loss while travelling. These services are included in the main insurance package, which costs $1.50 per day. PSK also sells policies to cover situations when a tourist cannot go on his planned journey because of unexpected and serious circumstances.

The types of cases insurers have encountered with their clients vary radically - from a routine trip to the dentist to heart surgeries in remote destinations.

The Moscow Times, November 10, 2000