OREANDA-NEWS. July 23, 2014. The Office of the Federal Antimonopoly Service in the Tver region (Tver OFAS Russia) received a confirmation from “VSK” Insurance OJSC on executing a determination on the case on an unlawful agreement with “Otkrytie” Bank.

Tver OFAS Russia established facts of including in insurance agreements the conditions that increase insurance costs for borrowers, as well as the facts of including in loan agreements an obligation to insure with a particular insurer – “VSK” Insurance OJSC. On the one hand, it restricted borrowers’ freedom to choose insurance organizations; on the other – prevented entry of other insurance companies to the insurance market.

As a result, Tver OFAS Russia recognized that the insurance company and the bank violated the antimonopoly law and issued a determination to eliminate the violations and their consequences. OFAS also requested “VSK” Insurance OJSC to transfer slightly over 4 million RUB and “Otkrytie” Bank – over 1 million RUB to the federal budget as the income obtained through violating the law.

“VSK” Insurance OJSC and “Otkrytie” Bank OJSC attempted to challenge OFAS determination; however, the Federal Arbitration Court of the North-West District found that the antimonopoly body had proved violations of the Federal Law “On Protection of Competition” in the actions of the Bank and the insurance company.

On 14th July 2014, the insurance company notified Tver OFAS Russia that to execute the determinations changes had been made to the rules of mortgage insurance by removing the provisions infringing the borrowers’ rights; the insured borrowers of “Otkrytie” Bank OJSC that obtained mortgage loans from the Bank from December 2009 were informed about possibility to change the agreements conditions, while the income – over 4 million RUB obtained as a result of violating the antimonopoly law was transferred to the budget.

“Competition-restricting agreements cause appreciable financial damage to insured borrowers that have to conclude loan agreements without an alternative to choose a different insurance company. Effectively, it means imposing disadvantageous insurance conditions upon borrowers. The Antimonopoly Service will continue combating similar agreements between economic entities and unlawfully obtained income”, pointed out the Head of Tver OFAS Russia, Vladimir Fomin.

For instance, Tver OFAS Russia shall recoup 1 million RUB from “Otkrytie” Bank that once again filed a lawsuit.

Part 4 Article 11 of No.135-FZ Federal Law “On Protection of Competition” of 26.06.2006 prohibits other agreements between economic entities (except ‘vertical” agreements that are allowed under Article 12 of the Law), if it is established that such agreements restrict or can restrict competition. Such agreements can include, in particular:

- Imposing disadvantageous contract conditions or conditions irrelevant to the subject matter of the agreement (unreasonable requirements to transfer financial assets, other property, including property rights, as well as consent to conclude a contract provided that provisions are introduced to the contract with regard to the goods in which a counteragent is not interested, and other requirements) (Clause 1)

- Preventing entry / exit of other economic entities to / from the market (Clause 3).