OREANDA-NEWS. October 05, 2011. The Office of the Federal Antimonopoly Service in the republic of Tatarstan (Tatarstan OFAS Russia) found that “Avangard” Share-Holding Commercial Bank” OJSC and “Avangard-Garant” Insurance Group” CJSC violated Clauses 5 and 8 Article 11 of the Federal Law “On Protection of Competition”, reported the press-centre of FAS Russia.

The case was initiated upon complaints of physical persons that the bank was forcing to conclude insurance contracts only with “Avangard-Garant” Insurance Group” CJSC.

“Avangard” Share-Holding Commercial Bank” OJSC and “Avangard-Garant” Insurance Group” CJSC violated the law by concluding a contract agreement. Consumers wishing to take bank loans were forced to conclude contracts for vehicle insurance or embezzlement insurance contracts only with “Avangard-Garant” Insurance Group” CJSC. The responsibility of the borrowers to conclude insurance contracts only with “Avangard-Garant” Insurance Group” CJSC creates advantages for the insurance company operating on the market of insurance services.

The bank also unlawfully required that borrowers should conclude life and health insurance contracts to obtain vehicle loans. However, the Law of the Russian Federation specifies that borrowers only must insure the collateral in terms of their responsibilities to creditors.

“Such requirements are disadvantageous for the borrowers and can lead to unreasonable refusals to conclude contacts between borrowers and other insurance organizations. This is a serious violation of the antimonopoly law”, commented Deputy Head of Tatarstan OFAS Russia, Ivan Scherbakov.

Reference:

Clause 5 Article 11 of the Federal Law “On Protection of Competition” prohibits agreements between economic entities if such agreements lead or can lead to imposing disadvantageous conditions upon counteragents or conditions irrelevant to the contract subject.

Clause 8 Article 11 of the Federal Law “On Protection of Competition” prohibits agreements between economic entities if such agreements lead or can lead to preventing market entry / exit of other economic entities.