FAS is in favour of reforming the OSAGO system

Deputy Head of FAS Andrey Kashevarov outlined proposals on reforming the system of mandatory third party liability insurance at the Forum in “Insurance Business during Times of Change. Strategy. Tactics. Practice”.

The Forum was organized by the Insurance News Agency with support of the All-Russian Insurers Union on 5 October 2016 in Moscow.

Apart from FAS representatives, the event was attended by representatives of the Supreme Court of the Russian Federation, the Ministry of Finances, the Bank of Russia, other ministries and departments as well the leading analysts of the insurance market, top-managers of insurance organizations and other companies.

The main items on the agenda concerned regulation of the insurance market “to the benefit of consumers”, the conduct control on the insurance market and tactics of doing insurance business and implementing various innovations.

Andrey Kashevarov represented the antimonopoly body at the Insurance Forum, where he gave a report on the “Pressing aspects of antimonopoly regulation of the insurance market” at a strategic session – “Insurance Market 2.0: Reloading”.

First of all, Andrey Kashevarov gave statistical data on complaints that physical persons have been filing to the antimonopoly bodies since 2014 regarding actions of insurers in the South Federal District. According to Deputy Head of FAS, particularly, due to the “forth antimonopoly package” being in effect, the number of such complaints has dropped down considerably.

At the same time, based on the analysis of the themes of complaints filed by citizens, lately the most pressing issue in the South Federal District as well as in many other regions of Russia is inability to purchase OSAGO [mandatory third-party liability insurance] policies, particularly, due to the long queues in the offices of insurance companies and alleged absence of OSAGO policy forms; and insurers reducing the scope of sales of OSAGO policies. Andrey Kashevarov specially pointed out that a significant part of such complaints were filed in the relevant periods predominantly against “Rosgosstreakh” Insurance Company” PJSC (from 37% to 68% of the total number of complaints).

In this context Andrey Kashevarov commented on a number of current cases opened upon signs of abusing dominance by “Rosgosstreakh” Insurance Company” PJSC, as well as collusions of other large insurers in the part of an unreasonable refusal to conclude OSAGO contracts due to various reasons.

FAS representative paid special attention to the positive judicial practice that confirms legitimacy of decisions made by the antimonopoly bodies on violating the antimonopoly law on the OSAGO market as well as determinations to hold administratively liable.

Then Deputy Head of FAS presented FAS position on some legislative initiatives of the regulator of the insurance market.

In particular, Andrey Kashevarov disclosed an opinion with regard to a transition to predominantly corrective maintenance within the OSAGO system as well as a proposal to improve the procedure on determining expenses for such maintenance.

Discussing changes in OSAGO ratemaking, Andrey Kashevarov said that FAS supported a proposal of the Ministry of Finances in the part of OSAGO policies variations depending on the limit upon insurance premiums. He pointed out, however, that, for instance, the antimonopoly authority cannot currently support introduction of new coefficients to the insurance tariffs.

An important part of Andrey Kashevarov’s report was information on FAS proposals to change the OSAGO concept in general: “We intend to move from insuring vehicle owner liability, as the owner of an increased hazard source, to insuring driver liability as a person directly capable to inflict harm using a vehicle. Such an approach will be preferable for insurers and will enable to, first of all, simplify and accelerate the procedure of concluding OSAGO contracts; eliminate the need for tender procedures and the need for control by insurers over the technical state of vehicles under the frame of public procurement”, stated Andrey Kashevarov.

Concluding the report, Deputy Head of FAS described the draft projects on the National Competition Development Plan, which in particular, outlines events aimed at decreasing state involvement in the economy for the purposes of competition development as well as a special “Road Map” for developing competition on the market of financial services. FAS already started receiving proposals from the largest associations of financial organizations to be included to the “Road Map”.