ANDREY KASHEVAROV: BANK COMMISSION ON MORTGAGE INSURANCE REACHES 55 %
It varies from 2 to 40 % for KASKO (comprehensive and collusion car insurance)
On 29th November, Deputy Head of FAS took part in the Insurance Sub-Committee of the Financial Services Committee of “Business Russia” National NGO.
He informed that in 2018 FAS surveyed 60 credit and 60 insurance companies to find out about their interaction in the course of insuring the borrowers in 2015 - 2017.
“22 banks mostly accepted policies of those insurance companies that had contracts with banks and pay them commissions. At the same time KASKO insurance commission varies from 2% to 40% by banks, and for mortgage insurance – from 5% to 55%”, said Andrey Kashevarov.
In his opinion, insurers also reported incidents when banks had refused to accept insurance policies in spite of conformity to the requirements set by credit organizations to financial soundness and conditions of insurance services. Seven insurance companies simultaneously reported that some credit companies give preferences to particular insurers. According to the information provided, such credit organizations include state-run banks and banks, whose groups include an affiliated insurance company.
It becomes obvious that the entire system is retargeted to generate additional income in the form of commissions rather than protect and remove financial risks. If an insurance company does not pay the interest to a bank, it is typically refused accreditation”, said Deputy Head of FAS.
In his opinion, insurance companies to a considerable extent depend on banks; therefore, to decrease abuse of rights by particular participants, the form of relations between market players must be changed.
“The principles of quality of both parties in contractual relations must be absolute”, emphasizedAndrey Kashevarov. “Our main goal should be maximum justified and fair pricing for financial services – insurance premium and credit rates”.
Finally, Deputy Head of FAS invited the event participants to tale part in the Expert Council for developing competition on the market of financial services on 17 December. The main item on the agenda will be relations between banks and insurance companies in the course of insuring the borrowers.
Deputy Head of FAS Department for Control over Financial Markets, Marina Pischulina and Head of the Insurance Market Division of FAS Department for Control over Financial Markets, Natalia Nikolaeva also took part in the Round Table “Issues of accrediting insurance companies at banks.