OREANDA-NEWS. June 18, 2008. ROSNO’s Ural Directorate has held a seminar on the topic "Interaction Between Banks, Construction and Insurance Companies in Implementation of Loan Programs Involving Financial Risk Insurance".

The event’s main objective was to acquaint employees of the banks and construction companies with the opportunities provided by ROSNO’s financial risk insurance services. The event was attended by over 30 companies from the banking and construction sectors, among them the Uralsky Bank of the Sberbank of Russia, Reiffeisenbank, RusBank, Gazprombank, KMB-Bank, etc. Among the major developers were Atomstrojkompleks, UK Investstroj, and Uralsky Dom.

The seminar guests were introduced to the financial risk insurance program covering the risks faced by the private investors who invest their funds in construction of residential and commercial real estate. According to Mr. Vitaly Us, head of the Division of Methodology and Innovative Insurance Types in ROSNO’s Financial Risk Insurance Centre, apart from the insurance coverage of the risks traditional for this sector (such as bankruptcy or liquidation of the developer, cessation of construction works, or failure to meet deadlines), ROSNO is the only company to offer its clients a worked-out and mastered scheme for insurance coverage of financial and entrepreneurial risks borne by the private investors and credit institutions alike. In particular, ROSNO can insure the risk of losing its investments in the real estate under construction, and the risk of the bank’s losses due to its failure to secure pledge on the mortgaged property (Bridge Insurance).

Furthermore, ROSNO offers its clients an innovative type of insurance, long mastered by the Western financial institutions, but not popular in Russia: insurance protection of banks against the risk of losses due to a drop in market value of the pledged property (HLTV insurance).

Special attention at the seminar was paid to the issues of underwriting in financial risk insurance. At the pre-insurance review stage (which is a mandatory procedure for banks and developers), the following is requested: financial documentation of the developer, business reference with information about the real estate built by such developer, project documentation, permits, and specimens of construction and investment contracts. In case of a Bridge Insurance or HLTV insurance, the insurer has to evaluate the bank’s policy in assessment of the borrowers’ solvency, its transaction performance procedure, and the structure of loan portfolio. Where necessary, the insurer will conduct special inspection with regard to the mortgaged property, borrower, seller, or developer.