Lilia Belyaeva on antimonopoly control over insurance companies in the Privolzhie Federal District

In 2013 - 2016 the antimonopoly bodies of Privolzhie Federal District (PFD) received more than 5000 complaints against OSAGO insurers, which accounts for over  90% of the total number of complains in insurance in the PFD

On 19 April 2017, an interdepartmental meeting of top officers of the law enforcement bodies of the Russian Federation took place in Nizhny Novgorod. Participants discussed the results o the efforts of the law enforcement bodies and regulators in the Privolzhie Federal District (PFD) on preventing, exposing and suppressing violations in the filed of mandatory civil liability insured of vehicle owners (OSAGO).

Deputy Plenipotentiary Envoy of the President of the Russian Federation in the Privolzhie Federal District, Alexei Sukhov; representatives of the General Prosecutor’s Office of the Russian Federation, the Ministry of Interior, the Investigation Committee the Russian Federation, the Federal Security Service, the Bank of Russia, the Federal Bailiff Service, the Prosecutors of the subjects of the Russian Federation in PFD and representatives of executive bodies, regional  bodies of the Ministry of Interior the subjects of the Russian Federation in PFD, the All-Russian Union of Insurers and Insurance Organizations attended the event.

FAS was represented by Deputy Head of the Department for Control over Financial Markets, Lilia Belyaeva, whose presentation focused on the result of antimonopoly control over insurance companies in PFD in the past four years.

For instance, Lilia Belyaeva reported that in 2013 - 2016 the antimonopoly bodies of Privolzhie Federal Districtreceived more than 5000 complaints against OSAGO insurers, which accounts for over 90% of the total number of complains in insurance in the insurance sector.

Informing about OSAGO market issues in terms of antimonopoly control, Lilia Belyaeva gave the relevant statistics for PFD: for instance, insurance companies executed 89 and 99 warnings to stop actions that have signs of violations.

The speaker said that due to failure to execute other warnings and on some other grounds, in 2013 - 2016 FAS regional Offices in PFD initiated antimonopoly cases under the Federal Law “On Protection of Competition”, based on which 50 decisions were made ascertaining violations and the same number of injunctions to eliminate the violations.

Most violations related to abusing dominance on the OSAGO market, particularly, improper values of insurance tariff coefficients when concluding OSAGO agreements; imposing additional insurance and other services upon consumers on a large scale, for instance, on technical inspection of vehicles by particular providers.

Regarding technical inspections by particular providers, Lilia Belyaeva pointed out that “the latest practice shows changes in this kind of abuse, which nowadays occurs predominantly in the form of independent sale of diagnostic cards of particular operators by an insurance company and concluding OSAGO agreements without technical inspection of motor vehicles, while among other things ultimately leads to a reduced demand for the services of other providers of technical inspection”.

According to the speaker, the antimonopoly bodies also exposed other types of violating the competition protection law. For instance, insurance companies enter into anticompetitive agreements, which, according to the decision made, led to reducing the scope of OSAGO services and imposing additional insurance policies upon physical persons. There is also unfair competition at tenders for the right to conclude OSAGO agreements, when insurers breached the law and reduced the insurance premium, to win the tenders.

In this context, Lilia Belyaeva reported that FAS Central Office intends to divide guidelines for its regional bodies that will be designed towards more efficient suppressing of such violations and, the above form of unfair competition, in particular.

Summing up, Lilia Belyaeva pointed out: “Overall, based on statistical data, one can conclude that the most important issues of the OSAGO market in Privolzhie Federal District are becoming increasingly less pressing, and there are fewer complaints against actions of insurance companies. Such trends are observed in a greater degree in Privolzhie Federal District, and in spite of similar tendencies the situation in other Federal Districts is less positive”.