OREANDA-NEWS. On April 03, 2008 the Federal Antimonopoly Service (FAS Russia) and the Federal Service for Insurance Supervision (Rosstrakhnadzor) discussed specificity of the tenders for Compulsory civil liability motor-vehicle insurance (OSAGO), Compulsory personal insurance of military personnel and Compulsory medical insurance (CМI), reported the press-centre of FAS Russia.

As stated at the meeting, the reasons why representatives of the governmental services get together to exchange opinions were numerous complaints against FAS Russia and Rosstrakhnadzor from the insurance companies, which are unhappy with the tender procedures for the above types of insurance.

Actors on the insurance market have been long complaining about numerous violations by the tender organizers, for instance, insured risks and exceptions from the coverage are often not spelt out, insurance conditions are not clearly defined, which considerably restrict market competition. In its turn, lack of requirement clarity allows the companies that organize the tenders to put pressure upon the insurance organizations and achieve most favourable conditions for themselves.

"This could have been expected as the new law abolished the procedures, at least at the federal level, for co-ordinating the tender documentation. Previously, many problems were avoided at that preliminary stage. Currently, when there is no preliminary control, but only post-control, every ordering party compiles the tender documentation the way it can", - explains Andrei Kashevarov.

Discussing specificity of the OSAGO tender procedures, Deputy Head of FAS Russia stated that as of today FAS Russia and Rosstrakhnadzor are preparing joint recommendations on organizing tenders for such type of insurance.

The project recommendations are based on the governmental decree for setting the OSAGO rates, which means that the existing legislation eliminates price competition in such type of insurance activities, because the rates set by the government are the same for all bidders. According to Andrei Kashevarov, "tenders for OSAGO allow quality competition when insurers offer additional services (visit to the scene of an accident, round-the-clock control service, etc.).

At the same time, pointed out Deputy Head of FAS Russia, all bidders for OSAGO can offer the same package of additional services, which again would put them in equal conditions and deprive the tender organizers of any choice.

In this connection Andrei Kashevarov emphasized: "FAS Russia believes it can be useful to introduce a set of quantitative criteria, when "the offers of different bidders definitely will not match". An example of such criteria can be a number of outstanding insurance cases or the ratio of outstanding claims to insurance reserves".

In the opinion of the antimonopoly authority, it is also necessary to discuss practicability of the OSAGO tenders for the governmental agencies that have a small fleet of motor vehicles. "Often the cost of a tender is higher than the sanctions for failure to hold the tender". Therefore, FAS Russia supports a position that if the contract price is below 100 000 Rubles, the obligation to organize a tender can be waived.

Summing up the results of the OSAGO discussion, Andrei Kashevarov put forward a proposal to the members of the Expert Council: "We would like the market actors to devise their suggestions for promoting competition on the insurance market".

As a follow-up of the discussion on compulsory personal insurance for the military personnel and CMI, FAS Russia and Rosstrakhnadzor decided to form a Working group, involving other concerned governmental agency and market players, to continue substantive dialogue about these types of insurance.

"Actions of the controlling bodies must be well-considered and should take into account specificity of the insurance business and potential social consequences if the insurance companies fail to fulfill their obligations", - emphasized the Head of the Federal Service for Insurance Supervision Ilya Lomakin-Rumyantsev.

The Head of the FAS Russia's Department for State Procurement Supervision, Mikhail Evraev directed attention of the insurance companies to the fact that in accordance with the existing legislation fixed rates are set only for OSAGO; therefore, in other types of insurance the winner should be selected using the price criterion under Article 28 of the 94-FZ Federal Law. The project recommendations on different types of insurance, prepared by FAS Russia jointly with Rosstrakhnadzor and the Ministry of Economic Development and Trade, will give detailed explanations as to how this price criterion should be used.

Mikhail Evraev also drew attention to the need of developing universal requirements for the insurance policies offered by the insurance companies as security over the contract obligations for state and municipal procurements of goods.

"In practice, such insurance policies sometimes turn out to be no more than pieces of paper without any real obligations ", - stated the Head of the Department.

Mikhail Evraev suggested developing such joint control over the operations of insurance companies that would exclude possibility of unfair competition on the insurance market for state procurement because the companies undertake obligations regardless to their financial performance and statutory requirements.

Summing up the outcome of the joint session of the Expert Councils, Deputy Head of FAS Russia Andrei Kashevarov informed: "In the near future FAS Russia, together with Rosstrakhnadzor and the Ministry of Economic Development, plans to develop joint recommendations on insurance trading for the state and municipal needs".