Permissible agreements between credit institutions and insurers.
LEGAL UPDATE No. 39.
Goltsblat BLP advises that Resolution of the Government of the Russian Federation No. 386 dated 30 April 2009 “On Permissible Agreements between Credit and Insurance Organisations” (the Resolution) has come into effect.
According to article 13 of the Federal Law “On Protection of Competition”, certain agreements and concerted actions of business entities might be recognised as permissible if they do not create an opportunity for eliminating competition on the relevant commodity market. The cases when such agreements and actions are permissible (general exceptions) are established by the Government of the Russian Federation. The Resolution lists general exceptions for agreements between credit institutions and insurers and establishes a 5-year effective term for these exceptions.
General exceptions apply to agreements of this type if they determine relations between the insurance parties against the borrower risks of the lender and insurance of the risks is mandatory for extension of the loan or credit under the law or a relevant agreement concluded by the credit institution and the borrower.
The Resolution recognises an agreement as permissible if the credit institution accepts policies (insurance contracts) of any insurers that meet its set comprehensive requirements on insurers and exhaustive insurance service terms. Borrowers of a credit institution are entitled to insure their risks with any insurance company meeting these requirements of the lender. The credit institution should not, in turn, set limits on the number of insurance contracts, the insurance amount and the size of the insurance premium.
Terms of agreements requiring the parties to refrain from concluding similar agreements with other credit institutions and insurers, requiring the borrower to insure against all risks with the same insurance company throughout the period of the loan or to arrange for insurance against risks other than that of loss of or damage to the pledged property and certain other terms are not permissible.
Conclusion of the agreement should not be a prerequisite for including the insurance company on the list of insurers complying with the credit institution’s requirements.
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