In the course of behavioral supervision, the Central Bank revealed cases of inappropriate behavior of agents of insurers – banks, car dealerships and other intermediaries who, under the guise of insurance, sold to borrowers “products with low customer value”: flash drives with information products, legal services or insurance policies not related to loans. The cost of the imposed products was often several times higher than the cost of the necessary insurance. Insurers whose agents behaved in this way are punished, but the proceeds from such sales have already settled in the pockets of the middlemen.
The Central Bank published a “Review of the practice of implementing insurance services when concluding a loan agreement”, in which it described seven relatively honest ways of taking money from the population under the guise of insurance. Among them: imposed on the consumer services of a legal or consulting nature, policies with a low insured amount or with protection against insured events that are unlikely to occur. One example is the purchase of life insurance services and a flash card with the Consumer’s Almanac, which was executed in one contract and was paid in one payment. The insurance premium was 3 thousand rubles, and the cost of the flash card was 137 thousand rubles. At the same time, it was noted in the loan agreement that the borrower agreed to purchase insurance services in the amount of 140 thousand rubles. In case of refusal from the insurance contract or early repayment of the loan, only a premium of 3 thousand rubles was subject to return.
According to Kommersant’s interlocutor in the insurance market, “this is a popular scheme that is implemented mainly in the regions in car dealerships.” There were such cases in Nizhny Novgorod, Tula, Krasnodar. “This is a fraudulent practice, but the insurer has little influence on its prevention,” he says, explaining that the main intermediaries of companies in the sale of policies are banks, they are “by seniority” and dictate conditions to insurers.
In another case, described by the Central Bank, the agent of the insurer, when applying for a car loan, offered the client to draw up a life insurance contract, as well as purchase a certificate for additional services provided by the agent (legal analysis of documents for a car, checking encumbrances). The cost of additional services was also several times higher than the amount of the insurance premium under the insurance contract. “At the same time, the terms of the insurance contract (insurance term, insurance certificate, etc.) were used in the certificate, which created an erroneous idea among the borrower that the additional services were related to insurance,” the Central Bank writes.
A separate category of manipulations is insurance policies that do not imply payments. They contain a list of exceptions in terms of payments for death due to an already diagnosed illness with a pre-filled in typographic column for the client’s consent to the terms of the contract. The Central Bank describes how, when buying a car on credit, a citizen with a second disability group entered into a life insurance contract worth 58 thousand rubles. Upon the occurrence of an insured event (death of the borrower), his spouse was denied compensation in the form of repayment of the loan – due to the borrower’s disease included in the list of exclusions from insurance coverage (it was also the reason for establishing disability). As a result, since the spouse could not pay on the loan, the car purchased for family use was seized. The regulator also cites cases of imposed purchase of policies for which it is impossible to return the premium paid in case of early repayment of the loan or in case of refusal of insurance.
Based on the results of identifying unfair practices, the Central Bank took supervisory response measures to the insurers of such agents. At the same time, according to the vice-president of the All-Russian Union of Insurers Viktor Dubrovin, insurers do not receive funds from such abuse of sellers. “We warned the Central Bank that pressure on insurers would lead to the fact that, under the guise of insurance, they would start selling other, sometimes openly fraudulent services,” he told Kommersant. “Insurance has become a civilized safe product – a contract that can be terminated without loss, but now this is used by unscrupulous intermediaries ”.
As a conclusion, the Central Bank recommended that insurers adjust business models, eliminate the practice of misleading consumers and imposing additional services on them, and strengthen control over agents, for example, within the framework of test purchases (“mystery shopper”).