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Books by Grigory Yavlinsky
Economics and Politics in Russia
The Center for Economic and Political Research (EPIcenter)
Nizhni Novgorod-Moscow, 1992





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(2) Articles of association of the mixed partnership "Nizhni Novgorod oblast division of the association for social protection of employees (Russian Insurance Pension Fund (RIPF))"

Article 1. General Provisions.

1.1. Territorial division of RIPF, hereinafter referred to as the "Division", is established in accordance with the statutory agreement of July 2, 1992, and the present Articles of Association.

1.2. The Division shall obtain the status of legal entity from the date of its state registration.

1.3. The official title of the Division shall be the Nizhni Novgorod Oblast Division of the Association of the RIPF.

1.4. The legal address of the division shall be: Lenin Avenue 54-a, Nizhniy Novgorod, 603149 Office 412

1.5. The Division has a current bank account, emblem, seal with its title on it, forms and other attributes of a legal entity, the samples of which and procedure of their application shall be defined by the Founders.

The official title and the emblem shall be used on the seal and forms of the Division and after due registration shall be protected by law.

Usage of the full title of the Association "Russian Insurance Pension Fund" or the abbreviation "RIPF" on the emblem, seal and forms shall be obligatory.

1.6. The organizational and legal form of the Division shall be a mixed partnership, based on the total assets of the Founders and other persons.

1.7. The Division acts in accordance with the current legislation of the Russian Federation, the Articles of the RIPF Association, the present Articles of Association and the Statutory Agreement.

1.8. The Division has no right to conduct commercial activities at the expense of pension assets.

1.9. In its operations the Division shall report to the Executive Directorate of the RIPF Association in accordance with item 2.4 of the present articles of Association.

1.10. The insurance activity of the Division shall be performed on the basis of the General Licence granted to the RIPF Association.

Article 2. Aims, Goals and Subject of Activity of the Division.

2.1. The aim of the Division shall be to enhance the social security of the citizens of the region through individual and collective voluntary insurance of the elderly, and other kinds of insurance effected at the expense of personal funds of the citizens and enterprises, hereinafter referred to as "the Insured".

2.2 The subject of activity of the Division shall be:

- voluntary additional individual and collective pension insurance of the citizens in the region, and other kinds of insurance;

- maintaining personal insurance accounts;

- participation in the organizational provisions for investment activity of RIPF;

- control over the use of the assets of RIPF invested into the region.

2.3. The goals of the Division shall be:

- to create and develop a regional network of non-state pension funds and those of enterprises with the status of representations, agencies and affiliates of the territorial division, and concentration on this basis of the funds at the expense of long-term insurance payments of the Insured;

- to create a highly effective and reliable regional automatized system of accounting and control over the flow of the insurance payments from the Insured, ensuring their absolute safety;

- to perform methodical, continuous and operational management of the affiliates, agencies and representations, and institutions of the Division;

- to provide methodology, organizational and technical assistance in the establishment and performance of non-state pension funds, which effect pension insurance together with RIPF, on its conditions and in accordance with its norms.


2.4. In accordance with the goals defined in item 2.3 of the present Articles of Association, the Division shall realize the following functions:

- concluding long-term personal agreements with natural persons on their voluntary pension and other kinds of insurance;

- concluding agreements on insurance payments for all the kinds of insurance, with legal persons;

- setting up its representations, agencies and affiliates, including those at the enterprises of the region, and providing them with the normative and methodological documentation;

- opening and keeping personal accounts of the Insured, and issuing nominal insurance policies of RIPF;

- concluding agreements with enterprises on insurance payments for the workers of the enterprises;

- accepting insurance payments and transferring them onto the current account of RIPF;

- computing interest on the insurance payments accumulated on personal accounts;

- informing the Insured of the opening and status of their personal accounts;

- ensuring payment of the funds accumulated on personal accounts to the Insured or their successors;

- communication to the Central Data Bank of RIPF the information on the Insured and the status of their personal accounts;

- concluding agreements on technical services for the pension insurance of citizens, with independent pension funds and enterprises;

- informing the Insured and other citizens of the region on insurance and investment activity of the Association for Social Protection of Employees (Russian Insurance Pension Fund);

- effecting other kinds of insurance;

- concluding agreements with legal and natural persons on rendering them methodological and consulting assistance on different kinds of insurance.

Article 3. The Rights of the Division.

The division enjoys the rights to:

3.1. Independently plan its economic, financial and other activities.

3.2. Have its own balance sheet, capital assets and circulating assets, independently make decisions on employment, dismissal and wages for the staff of the Division and heads of affiliates, agencies and representations.

3.3. Effect communications with legal and natural persons by telegraph, telex, e.mail and fax.

3.4. Carry out, with legal and natural persons, various transactions, agreements, or other legal acts, including credit and bill ones, corresponding to the statutory aims and goals of the Division.

3.5. Effect business contacts on the issues within the competence of the Division.

3.6. Build, purchase, lend (sublend) enterprises, as well as movable and immovable property, in order to carry out its statutory activities.

3.7. Send abroad and receive in the Russian Federation Russian and foreign experts for resolution of the problems connected with the performance of the Division.

3.8. Acquire and transfer property and non-property rights, personal rights inclusive.

3.9. Open rouble and hard currency accounts at banks and carry out corresponding operations on them.

3.10. Act as a plaintiff or as a defendant in the courts of law and arbitration.

3.11. Participate in the creation of joint ventures, joint- stock companies, banks, associations, funds and unions with Russian and foreign partners.

3.12. Obtain rouble and hard currency credits from the banks and other financial institutions.

3.13. Obtain and render financial assistance in roubles and hard currency.

3.14. Set up its affiliates, agencies and representations.

3.15. Sell, transfer to other legal and natural persons, exchange, lease, lend out and let to use free buildings, constructions, premises, equipment, transport means, industrial and technical production, communication means, office equipment and other movable and immovable property to legal and natural persons through bank transfer or cash payments.

3.16. Have its own specialized automobile park.

3.17. Perform payments in accordance with its obligations both in roubles and hard currency with legal and natural persons, foreign ones inclusive.

3.18. Accept payments through bank transfer or in cash without limitation of the payment amount.

Article 4. Property of the Division.

4.1. The property of the Division shall be formed out of the contributions of the Founders in accordance with the Statutory Agreement, further it shall be formed out of revenues from its own activities, contributions from its full members and depositor-members, other legal sources and belongs to its participants by the right of common stock property.

4.2. The Authorized Fund shall be formed out of contributions of its Founders to provide for the activities of the Division. The Authorized Fund shall amount to 150,000 (one hundred and fifty thousand) roubles with the following shares:

- the RIPF Association - 100,000 (one hundred thousand) roubles

- Nizhni Novgorod Regional Division of the Russian Fund for Charity and Health (NNRD RFCH) - 50,000 (fifty thousand) roubles

4.3. The Founders can make contributions with buildings, constructions, equipment and other material values, non- material assets, securities, funds in roubles and hard currency.

The value of the contributed property shall be appraised by decision of the Founders.

4.4. Decisions concerning the changes in the Authorized Fund and the membership of the Founders shall be taken by the Board of the Division and shall come into force not earlier than three months after a corresponding record is made in the state registration code.

The Authorized Fund can be increased only after all the Founders have fully contributed to it.

The Authorized Fund shall not be reduced if creditors object to such.

4.5. Each of the Founders can make additional contributions on general terms.

4.6. If a Founder quits the RIPF, its share in the Authorized Fund can be acquired by other Founders or the Division in accordance with the decision of the Board of the Division. Payments with the Founders who quit the RIPF shall be performed in accordance with the current legislation in terms envisaged in the Statutory Agreement.


Article 5. Distribution of Profit in the Division.

5.1. The profit from insurance activities of the Division is formed at the expense of the interest rate of the load. Interest rates of the load in each kind of insurance shall be determined by the RIPF Association for each kind of insurance.

5.2. Profits of the Division shall be allotted to:

- maintenance of the Division;

- obligatory payments to the budget;

- other obligatory payments;

- payment of interests on bank credits;

- payment of dividends on contributions of Founders' and depositor-members of the Division;

- formation of the production development fund and social development fund, wages fund, reserve fund, which is intended for coverage of extra expenses, losses and debts of the Division and other funds, providing for the statutory activities of the Division.

The Division shall create a reserve fund amounting to 15% of the Authorized Fund. The reserve fund shall be formed at the

expense of profit deductions until the fund reaches the indicated amount. The amount of annual deductions of the Founders and the reserve fund of the Division shall be determined by the Founders.

The order of formation, usage and amounts of other funds shall be determined by the Directorate of the Division.

Article 6. Membership in the Division and the Managing Bodies.

6.1. The Division comprises full members and depositor- members. Full members shall bear full joint liability for the obligations of the Division by all its property. Depositor-members shall be liable for the obligations of the Division within the limits of their contributions to its property. The Division shall not be liable for property obligations of its depositor-members.

Among the Founders, full members of the Division shall be:

- the Association for Social Protection of Employees (Russian Insurance Pension Fund);

- the Nizhni Novgorod Regional Division of Russia's Fund for Charity and Health.

6.2. Full members and depositor-members of the Division can be legal entities, both in the Russian Federation and abroad.

6.3. The Division shall admit new depositor-members on a contractual basis. The Board of the Division shall determine the terms and procedure of concluding such contracts.

6.4. Membership in the Division shall terminate: - upon the depositor-member's request; - on liquidation of the Division;

- by decision of the Board of the Division; - in other cases envisaged by the legislation.

A member shall quit the Division upon annulling the contract, with observance of all the conditions.

All the disputes concerning the contracts shall be settled according to the current legislation.

6.5. The Board of the Division shall be the supreme managing body of the Division.

6.6. The Board shall comprise the representatives from the Founders of the Division, and by decision of the Board - depositor-members (with a deciding vote) and members of the Directorate of the Division (with associative vote).

6.7. Member of the Board unable to attend should transfer their votes to their representatives and notify the Board of this.

6.8. The Board shall be competent to make decisions only if 100% of the votes are presented.

6.9. The meetings of the Board shall be held when it is necessary, at least once a quarter.

6.10. The Board shall elect by simple majority vote a Chairman of the Board to perform general managing of the Division.

6.11. Extraordinary meetings of the Board shall be summoned on the demand of the Chairman or the Auditor, or on the demand of at least two members of the Board.

6.12. An executive body - the Directorate - shall be created at the Division. The Directorate shall be headed by the Director of the Division, who shall be appointed and dismissed by the Chairman of the Board on the decision of the Board of the Division.


6.13. The Board shall be solely competent on the following:

a) determining the major activities of the Division, approval of long-term plans and reports of their fulfillment;

b) changing the Articles of Association of the Division;

c) electing and recalling the Chairman of the Board, appointing and dismissing the Director of the Board, the Auditor, approving the composition of the Auditing Commission, admitting new depositor-members into the Division;

d) approving annual reports on the performance, including representations, agencies and affiliates of the Division, approving of accounts and reports of the Auditor and the Auditing Commission, the procedure of profit distribution, determining the procedure of covering the losses;

e) making decisions on property accountability of the officials of the Division;

f) issuing permits on signing contracts and agreements for amounts exceeding the reserve fund of the Division;

g) decision-making on discontinuation of the performance of the Division, appointing the Liquidation Commission, and approving the liquidation balance sheet;

h) determining the amount, the forms and the procedure for additional contributions from the Founders;

i) decision-making on acquisition of the share of a former member of the Division;

j) exclusion of the Founders and depositor-members from the Division;

k) decision-making on changing the Authorized Fund.

6.14. The RIPF Association has 51% of the votes on the Board. The remaining votes shall be distributed in proportion to the contributions to the Authorized Fund.

6.15. In the case when the decisions of the Board can directly touch upon the interests of one or several members of the Board, in consideration of their exclusion from the Division, in particular, they or their representatives shall not participate in the voting (except for the full members of the Division).

6.16. The decision shall be taken by a qualified majority for item 6.13, paragraphs (b), (g), (j) and (k). - 225 -

6.17. The Chairman of the Board shall:

- represent the Division in the relations with third persons and enjoy the right of the first signature without the need for authorization;

- enjoy the right of a deciding vote in case of a tie vote;

- approve regulations on the funds, regulations on the Directorate of the Division, and other documents;

- performs control over the assets and property of the Division.

6.18. The Director of the Division shall:

- manage all the current activities of the Division;

- dispose of the assets and property of the Division; - employ and dismiss the staff of the Division in compliance with the labour law;

- sign documents on behalf of the Division without the need for authorization;

- conclude on behalf of the Division economic and other contracts and agreements and ensure their fulfillment;

- represent the Division in its relations with legal entities and citizens;

- open current and other accounts at banks;

- make decisions on creation, reorganization and liquidation of affiliates, agencies and representations, approve corresponding Regulations, and appoint corresponding directors;

- determine the organizational structure of the Division, approve normative documents regulating the relations within the Division;

- determine conditions of wages and remunerations to the officials of the Division, heads of the affiliates, agencies and representations;

- perform all other functions resulting from the aims and goals of the Division, as well as other functions which can be entrusted to him by the Board.

6.19. The Director of the Division shall be responsible to the Chairman and the Board of the Division, and on the issues of insurance - to the RIPF Association.

6.20. The Auditor shall control the performance of the Director and other officials of the Division. The Chairman and the Director of the Division cannot be members of the Auditing Commission. The Auditing Commission shall perform in compliance with the current legislation.

The RIPF Association can either independently or with participation of the Founders conduct an extra auditing of financial and economic performance of the Division.


Article 7. Personnel.

7.1. Personnel of the Division shall be recruited out of the citizens of the Russian Federation or foreign citizens.

7.2. The Directorate shall conclude contracts with all the employed personnel in compliance with the current law.

7.3. Foreign staff shall be provided accommodation and shall be granted the use of it, as well as the public utilities and medical services on the conditions fixed in the contract with foreign personnel.

Article 8. Changes in the Articles of Association and Termination Procedure.

8.1. Changes into the present Articles of Association can be introduced by decision of the Board of the Division.

8.2. Liquidation of the Division shall be regulated by the present Articles of Association and the current law.

8.3. The Division shall terminate its performance:

a) by decision of state arbitration or court;

b) by decision of the Board;

c) on other grounds envisaged by the law.

Termination of the Division shall take place by means of its reorganization (merging, joining, division, isolation, transformation) or liquidation.

Necessary changes in the statutory documents and the state registration code shall be made upon reorganization of the Division, and corresponding records shall be made in the code upon liquidation of the Division.

Reorganization of the Division shall entail transfer of the rights and duties of the Division to its successors.

8.4. Liquidation of the Division shall be effected by a liquidation commission appointed by the Board of the Division.

The competence in managing the Division shall be vested in the liquidation commission from the time it is appointed. The liquidation commission shall evaluate the current assets of the Division, determine its debtors and creditors, including the insured citizens, and settle accounts with them, take measures so that the debts of the Division to the third persons and its participants are covered, draw up a liquidation balance sheet and submit it to the Board.

8.5. Liquidation of the Division shall be considered completed, and the Division terminated from the time such a record is made in the state registration code.

8.6. The liquidation commission shall be liable by property for the damage caused by it to the Division, its Founders, as well as third persons in accordance with the civil law of the Russian Federation.

8.7. Property and funds remaining after all the clearances upon liquidation of the Division shall be subject to distribution in accordance with the decision adopted by the Board.

8.8 The disputes of the Division with Russian and foreign legal persons and citizens shall be examined in compliance with the law of the Russian Federation, state arbitration, court and other bodies.

Article 9. Other Provisions.

9.1. Invalidation of certain provisions of the Articles of Association shall not entail Invalidation of the whole of the Articles of Association.

9.2. The present Articles of Association are drawn up in Russian in 8 copies, each having equal legal force.

Director General RIPF Association

Chairman of the Board, Nizhni Novgorod Regional Division of the Russian Fund for Charity and Health


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