Russian insurers have refused to insure construction projects with equity holders, reported Forinsurer.
Regulations are weak regarding responsibility of builders and real estate investors and there are high number defrauded investors.
Moreover, a significant loss is inevitable if banks reduce the volume of mortgage loans.
Under Russian law, all liability risks to equity holders must be insured effective Jan. 1 2014.
Insurers are currently working on insurance contracts for projects with co-investors, but they are not being designed for mass distribution, Alexander Millerman, CEO of CAO "Hephaestus" said.
Such risks may be covered by specialized mutual insurance organized by builders. Commercial insurers may consider excess reinsurance for such risk.