OREANDA-NEWS. By its Order No. OD-1155, the Bank of Russia restricted the licence to carry out compulsory motor third party liability insurance (hereinafter, OSAGO) of Rosgosstrakh, limited liability company (registration number in the unified state register of insurance agents 0977).

This decision was taken due to the company's failure to timely meet Bank of Russia instruction with regard to the violation of the procedure for concluding OSAGO contracts, particularly, the application of the bonus-malus system (allows for core tariff discounts and surcharges depending on the insurance payments, hereinafter, the BMS) for calculating OSAGO insurance premiums. The decision becomes effective the day it is published in the Bank of Russia Bulletin.

Rosgosstrakh LLC committed large-scale violations of OSAGO law, including depriving car owners of the legitimate no-claims discount, ungrounded refusal to conclude OSAGO contract, and imposing additional services.

During the period from 1 April till 25 May 2015 alone, the Bank of Russia received form the citizens more than 2,300 complaints on the actions Rosgosstrakh LLC took when concluding OSAGO contracts. From the beginning of the year the company received 385 Bank of Russia instructions. 78 rulings were passed on bringing the company to administrative responsibility under Article 15.34.1 of the Code of Administrative Offences (ungrounded refusal to conclude a public contract of insurance or imposition of additional services when concluding a compulsory insurance contract).

The restriction of the insurer's licence prohibits the company from concluding OSAGO contracts and introducing amendments resulting in increase in insurer's obligations under the current contracts.

The insurance company must accept notifications of claim and meet its obligations under the previously concluded OSAGO contracts. The Bank of Russia will control OSAGO benefits paid by the insurer.

As Rosgosstrakh LLC prevails in the OSAGO market in some regions, the Bank of Russia gives special consideration to the availability of OSAGO service for car owners. The Bank of Russia will also continue negotiations with the Russian Association of Motor Insurers aimed at stabilising the situation in the OSAGO market.

Should you have any problems receiving OSAGO insurance benefits from Rosgosstrakh LLC and acquiring OSAGO policies from other insurance companies, the Bank of Russia advises to pass a complaint to the Bank of Russia Service for Protection of Financial Services Consumers and Minority Shareholders.