President Dmitry Medvedev has excluded Rosgosstrakh from a list of strategic companies, a move that allows the state-owned insurance giant to sell additional shares.

As a result of the additional share issue, the government will lose its blocking stake in the insurer, but will receive a “golden share,” giving it control over key aspects of the company’s business.

Rosgosstrakh co-owner Danil Khachaturov confirmed that the president signed the order, as did Vera Balakireva, deputy head of the Finance Ministry’s financial policy department.

The exclusion did away with the final hurdle to an additional share issue for the company. Khachaturov wrote in a letter to Finance Minister Alexei Kudrin in November that an additional placement would allow the insurer to preserve its financial stability.

On Oct. 1, the company’s equity capital stood at 17.2 billion rubles ($570 million), more than 95 percent of which was illiquid and being used for internal loans within the group. Further, the company’s debt reached 12.3 billion rubles, accumulated losses reached 2 billion rubles and a further loss of 3 billion rubles is expected because of the fall in the stock market.

The company saw profits of 1 billion rubles last year and netted 2.5 billion rubles in the first half of 2009.

In December, Kudrin proposed to Prime Minister Vladimir Putin two options for an additional share issue by Rosgosstrakh: Either the state could keep its blocking stake by buying 8 billion rubles of additional stock, or it could not participate, letting its stake drop to 16 percent. Putin chose the second option, and ordered the government to “provide for state interests” and get compensation for lowering its stake.

The Economic Development Ministry agreed to remove Rosgosstrakh from its list of strategic enterprises on the condition that it would receive a “golden share” that would protect the state’s interests in the company. The “golden share” would allow the state veto power on the decisions of shareholders on strategically important issues, such as share issues, changes in the company charter and restructuring, as well as allow it to conduct audits and investigations and change the company’s leadership.

The introduction of a “golden share” implies that the state sees Rosgosstrakh as a systematically important company and won’t interfere it its development, Khachaturov said.

Shareholders will discuss the increase in the company’s capital on Sept. 30, he said. The additional share issue could be as much as 27 billion to 28 billion rubles, which means that the state’s share could drop to 13.1 percent. The issue will not be open to new shareholders.

It is not known whether the state will participate in the placement.