Collective insurance of borrowers. Antitrust context

The crisis of 2008 forced Russian financial organizations, besides conducting the traditional activities, to explore new markets and offer new financial products to the clients. Such new products include life and health insurance for the borrower, who executes a credit agreement with the bank. Such service quickly became popular with the consumers and brought significant income to the financial organizations.

However, as there is no clear legal governance, many problems have surfaces that are related to the banks’ misconduct as well as to ambiguous claims form the public authorities, including the antitrust bodies. We will consider the themes of collective insurance of the borrowers’ life and health, which are topical nowadays.

The banks sell the insurance of the borrowers’ life and health on the basis of agreements with the insurance companies. Said agreements stipulate the main terms of the insurance (insurance period, insurance amount and premium, list of insured accidents etc.), fix mutual rights and obligations of the bank and the insurance company within the framework of selling the collective insurance of the borrowers’ life and health.

The agreements are not executed for each borrower separately, but rather for all potential borrowers, who would want the service offered by the bank at granting the credit. Thus, said agreements regulate the interaction of the banks and insurance organizations, when doing the collective insurance of the borrowers’ life and health…

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