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MOSCOW -- Insurers and brokers dealing with Russia are keeping a cool head amid the deepening crisis following the ruble devaluation, a debt moratorium and the firing of Prime Minister Sergei Kiriyenko.

"We are not doing anything drastic, like telling our clients to hold off," said Simon Gibbon, head of country risk at London-based credit insurer Trade Indemnity P.L.C.

Most foreign insurers and reinsurers have a limited exposure to Russia relative to their business with other emerging markets. Nevertheless, Mr. Gibbon said, the political upheaval, including the reinstatement of Viktor Chernomyrdin as prime minister, the incorporation of industrial and financial vested interests into the government, the lack of effective government and the lowered confidence of foreign investors, will have long-term consequences to everyone in business and the rest of Russian society.

The crisis in Russia coincides with a big shake-up in the domestic insurance sector. After Jan. 1, 1999, the capitalization requirement for insurance companies will rise to between 3 million and 5 million rubles ($381,600 and $636,000 as of Aug. 25 exchange rate) from 100,000 rubles ($12,720), depending on the line of business.

This is likely to prompt consolidation within the domestic insurance sector, cutting the number of companies to around 500 from an estimated 2,500 today, predicted Anatoly Zlubin, formerly first vp of state reinsurer Ingosstrakh and now an adviser to Aon Corp. in Moscow.

Ingosstrakh is likely to take a number of troubled domestic insurers under its wing, Mr. Zlubin said.

On Aug. 17, former Prime Minister Kiriyenko and Central Bank President Sergei Dubinin announced:

* The ruble would be allowed to float within a band between 6.0 and 9.5 rubles to the U.S. dollar, prompting a rapid devaluation. Previously, the band was 5.7 to 7.13 rubles to the U.S. dollar.

* Trade in treasury bills, known as GKOs, and government bonds, known as OFZs, would be halted.

* A 90-day moratorium would be instituted on some repayments of foreign debt, including repayments of commercial bank loans.

* Temporary restrictions would be placed on foreign exchange operations by Russian residents.

The immediate impact on local insurance companies was an increase in reinsurance costs and doubts about when premiums could be paid.

"It will be mostly a problem of foreign exchange for local Russian companies, who have to pay more rubles," said Victor Tarasov, Moscow office head of broker J&H Marsh & McLennan.

Domestic Russian insurers typically have collected premiums from their clients in rubles, exchanged these immediately into dollars and paid their reinsurance premiums via the brokers, Mr. Tarasov explained.

But that process can take five days or more, resulting in big losses for insurers and brokers alike in times of currency turbulence, Aon's Mr. Zlubin noted. "Let's say 10 days ago our clients received insurance premiums from their insureds at a rate of 6.2 rubles to the dollar. They paid us within five days, when the rate was 7.0 rubles to the dollar. Now we have to buy dollars to pay for their reinsurance at a rate of 7.7 to the dollar (as of Aug. 25). We lose, our brokerage and the insurance companies lose, too," Mr. Zlubin said.

But the local insurance companies have little clout when buying dollars, even though in most cases they are affiliates of large banks, noted Peter Muller, director of business at the Moscow office of Munich Reinsurance Co. The halt to trading in government debt instruments such as GKOs and OFZs has hit insurance companies' claims-paying abilities. Russian insurance regulations stipulate that local insurers keep most of their reserves in GKOs, said Mr. Muller. Until the new government publishes its regulations for holding and/or selling government debt, the insurance sector has little idea of how to proceed.

Rudolf Shuravin, deputy chairman of Ingosstrakh in Moscow, said the Russian insurer so far has not been directly affected by the currency crisis because the insurer keeps much of its funds outside Russia. Ingosstrakh also receives most of its premiums in dollars on cargo, aviation and hull coverage, he said.

Ingosstrakh is expecting to absorb some of the smaller Russian insurers, "but only those with a good client base. It depends on the situation," Mr. Shuravin said. "If Russian companies collapse, this will mean a substantial increase in business for Ingosstrakh."

During a period of currency instability, Western companies that have joint ventures with Russian partners in Russia must be very careful how they draw up their joint venture contracts or joint operating agreements to reflect which partner is in charge of insurance premium payments and which receives claims compensation, said Mark Benjamin, associate director of non-marine reinsurance at Aon Corp. in London.

This is because of difficulties in transferring premium payments from Russia to the West and the question of which partner receives the claims compensation.

"Some contracts don't even refer to insurance, and then it's every man for himself. The contract itself could be shaky, and we try to avoid that," Mr. Benjamin said.

If the Western partner bears the lion's share of the capital investment, then that partner could ensure that it pays the insurance premiums and receives the claims. But companies must be careful on two points, noted Mr. Benjamin. They must not impinge on local regulations that do not permit non-admitted policies -- those written by companies not registered in Russia, and they must not expose themselves to currency fluctuations in an unstable economy.

"There is a subtle difference between this and saying you don't trust your Russian partner, but you have to do it, " said Mr. Benjamin.

On the political risk insurance side, Germany's Hermes Kreditversicherung has a total exposure of 3.65 billion deutsche marks ($2.03 billion) in short-term trade-related insurance coverage in Russia, a company spokesman said. For its medium- and long-term insurance, Hermes stipulated a ceiling of 1.5 billion deutsche marks ($833.3 million) for 1998. The trade insurance is not included in this ceiling, the spokesman said. He was unable to confirm figures for Hermes' guarantees to German commercial banks.

Hermes has insured trade with Russia on the receipt of a guarantee from Russian private sector banks such as SBS Agro and the International Moscow Bank. Now that the banks are facing a liquidity crunch, Hermes is considering asking for government guarantees on new business.

Hermes' future policy toward Russia was expected to be decided at a ministerial meeting scheduled last week, the spokesman said. The outcome will be announced today, he said.

According to German government sources, German commercial banks have a total of 55 billion deutsche marks ($30.55 billion) in loan exposure in Russia. Of this, 80% to 90% is covered by Hermes, said Jean Sassus, banking analyst at London-based stockbroker SG Securities. Compared with the 1997 German gross domestic product of 3.80 trillion deutsche marks ($2.11 trillion), Hermes' exposure to Russia represents about 1.2% of German GDP, he added.

But Mr. Sassus noted that most of this exposure represents either old rescheduled foreign debts of the former Soviet Union or project loans to joint ventures in Russia involving German companies and with the guarantee of the German state. The losses are not a result of banks being rash in their lending, he said. "You are lending money to clients with a minimum of risk. German banks have not been stupid lending to Russian companies," said Mr. Sassus.

Trade Indemnity's Mr. Gibbon said, "No one with any sense would bet their farm on Russia."

The British, French and Italian state political risk insurers have little new exposure to Russia. But Italy's Sezione Speciale per l'Assicurazione del Credito all'Espotazione, or Sace, has about 10.60 trillion lire ($5.97 billion) of exposure to Russia, virtually all of it rescheduled debt of the former Soviet Union that had been assumed by Russia, said Pascuale Petrella, deputy managing director in charge of insurance at Sace.

"We are following the situation but have not taken any new decisions. They (the Russian government) have assured us they will keep up with the payments," Mr. Petrella said. No new risk assessment committee meetings are planned to discuss the Russian situation. In contrast to Hermes, Sace has insured loans on projects involving only the Russian public sector, not the private sector. "We were going to think about covering the private sector, but now we will think very carefully," Mr. Petrella said.

Paris-based Coface also has little exposure other than rescheduled Soviet-era debt, a company spokesman said. Coface also demands a sovereign guarantee to cover short- and medium-term risks to Russia. Existing debt payments have been made on time by Russia, with the last payment Aug. 20, the Coface official said. He declined, however, to give figures for Coface's total exposure to Russia or its limits on coverage.

British state insurer Export Credit Guarantee Department also demands a government guarantee before granting coverage to Russia. But the demand for existing insurance has been almost non-existent. Following a visit to Russia last year by British Prime Minister Tony Blair, the ECGD granted an extra L500 million ($819.8 million) of capacity for insurance of Russian projects involving British companies. None of this extra coverage has been used, the ECGD spokesman said. "It's not a question of being able to pick and choose what to support; it's just a question of the demand not being there," he said.

Lloyd's of London underwriters also have seen little business go to Russia.

"We are not seeing too much demand. But our view is pretty negative at the moment," said Geoffrey Lynch, head of political risk at the Wellington Underwriting Agencies Ltd. Wellington has insured prepayments on hard commodities such as oil and metals. Since these are short-term deals and cover terms shorter than the 90 days stipulated in the Russian debt moratorium, Mr. Lynch believes Wellington syndicates are unlikely to face claims immediately from the crisis.

Trade Indemnity's Mr. Gibbon echoes this. "The business we are doing is trade finance-related and all under 180 days. In direct terms, we should not be affected," he said.

Munich Re's Mr. Muller stressed that his company is committed to Russia for the long term.