Date: 5 months ago   Category: Finance

The Central Bank has told about unfair sales of investment life insurance — Rambler News Service


The Central Bank has expressed concern about growth of number of complaints concerning ISZh which share among all addresses which have come to the regulator in the current year has increased more than twice. The Central Bank has carried out monitoring and has found out that agents of insurers insufficiently inform clients on features of ISZh. "The Bank of Russia has developed the concept on improvement of regulation of the investment life insurance (ILI). Changes will allow to stop growth of unfair sales of this product" — it is noted in the press release of the Central Bank. According to the Central Bank, ISZh is one of the most fast-growing segments of the Russian insurance market. Awards of insurers on this product in six months of the current year have grown by 65% in relation to last year and have made 138 billion rubles. The regulator has noted that more than 90% of contracts ISZh consist with mediation of the third parties, namely the credit institutions acting as agents of insurers. The press service of the Bank of Russia has expressed concern about growth of number of complaints concerning ISZh which share among all addresses which have come to the regulator in the current year has increased more than twice. The Central Bank has carried out monitoring and has found out that agents of insurers insufficiently inform clients on features of ISZh. In particular, consumers are convinced that signing of the contract of ISZh will bring big benefit, than opening of a contribution in bank. This information isn't true as average profitability under three-year contracts ISZh equals 3,3% per annum, and on five-year-old — 2,4% per annum. In addition, clients are sure that they can return the award paid to the insurer in case of early termination of the contract of ISZh. Consumers also consider that means in ISZh are always insured by Deposit Insurance Agency. The regulator is convinced that such model of sales of this product forms incorrect expectations of clients. It can lead to disappointment of consumers in ISZh and to the subsequent decline in the insurance market. In this regard the Central Bank suggests to toughen regulatory measures in this sphere. The regulator supports full disclosure of information on features of such contracts and strengthening of control of activity of agents of insurers. One more considered measure of regulation of the market of ISZh is the ban on sale of this product by the third parties. In the average and long term of the Central Bank I intend to reform qualification of retail investors, to reconsider parameters of regulation of difficult financial instruments and to increase penalties for insurers for violation of the existing requirements.

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