OREANDA-NEWS. December 31, 2010. At the moment developing competition on the market of the services of insurance intermediaries is one the priorities for the Federal Antimonopoly Service (FAS Russia).

To develop competition and eliminate the conflict of interest, FAS Russia finds it necessary to form the working group, which will be drafting proposals to amend the law of the Russian Federation on insurance in order to clarify the scope of reference of insurance intermediaries.

No. 4015-1 Law of the Russian Federation “On Organizing Insurance Business in the Russian Federation” of 27th November 1992 specifies two types of insurance intermediaries: insurance agents and insurance brokers.

These insurance intermediaries are competitors, but they have different market entry conditions. Insurance brokers must be licensed and have to submit reporting documentation to insurance regulatory bodies; while insurance agents act without licenses.

The law on insurance does not clearly distinguish the functions of insurance brokers and insurance agents: both can receive remuneration from the insured and represent the interests of several insured persons. It can lead to the conflict of interests as selecting the insurer for the clients an insurance intermediary often is guided by the size of the agent commission rather then by the conditions of insurance services and financial stability of the insurer.

FAS Russia invites members of the Expert Council for developing competition on the market of financial services and representatives of the interested organizations and bodies to joint the working group.

Proposals regarding membership in the working group should be filed to FAS Russia by 20th January 2011 on (499) 795 70 83 or e-mail bozhko@fas.gov.ru.