OREANDA-NEWS. October 03, 2008. The Federal Antimonopoly Service (FAS Russia) finalized the case initiated against "Raiffeisenbank" CJSC and insurance companies - "Military-Insurance Company" OJSC, "Standart-Reserve" Closed Joint-Stock Insurance Company, "ROSNO" OJSC, "Sogaz" OJSC, "Yugoria" Insurance Group" OJSC, "Rossia" Open Joint-Stock Insurance Company, "Rosgosstrakh" OJSC and "AlphaStrakhovanie" OJSC for breaching Article 11 of the Federal Law "On Protection of Competition", reported the press-centre of FAS Russia.

As the bank and insurance companies voluntarily eliminated the antimonopoly violation and its consequences, FAS Russia has concluded that there are no grounds to issue a determination o the bank and the insurance companies on terminating the competition-restrictive agreement and exercising actions towards supporting competition.

Establishing the fact of violating Article 11 of the Federal Law "On Protection of Competition" constitute the grounds for imposing administrative charges upon the violators under Article 14.32 of the Code of the Russian Federation on Administrative Violations.

Under the Notes to Article 14.32 of the Code of the Russian Federation on Administrative Violations, a person that voluntarily reports to the antimonopoly body on entering into a competition-restrictive agreements, prohibited by the antimonopoly legislation of the Russian Federation, and refused to participate or further participate in such an agreement and presented the available information (data) that facilitate establishing the fact of such an agreement, is relieved from administrative liability.

FAS Russia will consider relieving the bank and the insurers form administrative liability in accordance with the procedures specified in the Code of the Russian Federation on Administrative Violations.

The case was initiated following the agreements singed between "IMPEKSBANK" OJSC with the above insurance companies in 2006 in order to develop co-operation on Auto loan programmes.

"IMPEKSBANK" OJSC terminated its activities dues to joining "Raiffeisenbank" CJSC. FAS Russian initiated the case against insurance companies and "Raiffeisenbank" CJSC as the legal successor of "IMPEKSBANK" OJSC.

Investigating the case, FAS Russia examined the cooperation agreements with the insurance companies singed by "IMPEKSBANK" OJSC as well as by "Raiffeisenbank" CJSC before and after "IMPEKSBANK" OJSC joined it.

Before the investigation started, "Raiffeisenbank" CJSC had forwarded a statement to FAS Russia where it had admitted antimonopoly violations, particularly coordinated rates specified in the cooperation agreements, closed tenders for selecting insurance companies and lack of publicity in the requirements to the insurance companies.

"Raiffeisenbank" CJSC voluntarily admitted antimonopoly violations; at the same time it petitioned to FAS Russia for relieving from administrative liability for entering into competition-restrictive agreements under Article 14.32 the Code of the Russian Federation on Administrative Violations.

At the first session of the Commission, "Raiffeisenbank" CJSC was supported by insurance companies that submitted similar petitions to FAS Russia. Furthermore, in course of investigating the case on competition-restrictive agreements signed by "IMPEKSBANK" OJSC and "Raiffeisenbank" CJSC, the following insurance companies voluntarily reported to FAS Russia: "Rosgosstrakh - Stolitsa" Ltd., "Rosgosstrakh - Sibir" Ltd., "Rosgosstrakh - Severo-Zapad" Ltd., "Rosgosstrakh - Povolzhye" Ltd., "Rosgosstrakh - Tatarstan" Ltd., "Rosgosstrakh - Yug" Ltd., "Rosgosstrakh - Ural" Ltd., "Rosgosstrakh - Centre" Ltd., "Rosgosstrakh - Dalny Vostok" Ltd., "Rosgosstrakh - Accord" Ltd., "MAKS" CJSC and "Soglasie" Insurance Company" Ltd. The insurance companies were respondent parties to the case.

Having investigated the case, FAS Russia concluded the following:

- The agreement singed by "IMPEKSBANK" OJSC with "Standart-Reserve" Closed Joint-Stock Insurance Company breached Article 11 of the Federal Law "On Protection of Competition" as it led (could have lead) to fixing the rates for insurance services;

- The agreements singed by "IMPEKSBANK" OJSC with "Standart-Reserve" Closed Joint-Stock Insurance Company, "Military-Insurance Company" OJSC, "ROSNO" OJSC, "Sogaz" OJSC, "Yugoria" Insurance Group" OJSC, "Rossia" Open Joint-Stock Insurance Company, "Rosgosstrakh" OJSC and "AlphaStrakhovanie" OJSC, "Rosgosstrakh" OJSC, "Rosgosstrakh - Stolitsa" Ltd., "Rosgosstrakh - Sibir" Ltd., "Rosgosstrakh - Severo-Zapad" Ltd., "Rosgosstrakh - Povolzhye" Ltd., "Rosgosstrakh - Tatarstan" Ltd., "Rosgosstrakh - Yug" Ltd., "Rosgosstrakh - Ural" Ltd., "Rosgosstrakh - Centre" Ltd., "Rosgosstrakh - Dalny Vostok" Ltd., "Rosgosstrakh - Accord" Ltd. and "MAKS" CJSC breached Clauses 4 and 5 Part 1 Article 11 of the Federal Law "On Protection of Competition" as they resulted (could have resulted) in economically and technologically ungrounded refusal to enter into agreements with particular buyers or sellers as well as imposing unfavorable conditions of the insurance contract upon the borrowers;

- The agreement singed by "IMPEKSBANK" OJSC with "MAKS" CJSC breached Clause 6 Part 1 Article 11 of the Federal Law "On Protection of Competition" as it resulted (could have resulted) in economically, technologically or otherwise ungrounded fixing of different rates for the same insurance services;

- "IMPEKSBANK" OJSC coordinated economic activities of insurance companies resulted (could have resulted) in fixing rates for insurance services which is prohibited by Part 3 Article 11 of the Federal Law "On Protection of Competition"

- The agreements singed by "Raiffeisenbank" CJSC with "Military-Insurance Company" OJSC, "Standart-Reserve" Closed Joint-Stock Insurance Company, "ROSNO" OJSC, "Rosgosstrakh - Accord" Ltd., "Rosgosstrakh - Severo-Zapad" Ltd., "Rosgosstrakh - Stolitsa" Ltd., "MAKS" CJSC and "Soglasie" Insurance Company" Ltd., breached Clause 1 Part 1 Article 11 of the Federal Law "On Protection of Competition" as they led (could have lead) to fixing the rates for insurance services;

- The agreements singed by "Raiffeisenbank" CJSC with с "Standart-Reserve" Closed Joint-Stock Insurance Company, "Military-Insurance Company" OJSC, "ROSNO" OJSC, "AlphaStrakhovanie" OJSC, "Rosgosstrakh - Accord" Ltd., "Rosgosstrakh - Severo-Zapad" Ltd., "Rosgosstrakh - Stolitsa" Ltd., "MAKS" CJSC and "Soglasie" Insurance Company" Ltd. breached Clause 4 Part 1 Article 11 of the Federal Law "On Protection of Competition" as they resulted (could have resulted) in economically and technologically ungrounded refusal to enter into agreements with particular buyers or sellers;

- The agreement singed by "Raiffeisenbank" CJSC with "ROSNO" OJSC breached Clause 5 Part 1 Article 11 of the Federal Law "On Protection of Competition" as it resulted (could have resulted) in imposing unfavorable conditions of the insurance contract upon the borrowers.

In course of the case investigation, under Clause 1 Part 1 Article 48 of the Federal Law "On Protection of Competition", "Raiffeisenbank" CJSC and insurance companies submitted documentation confirming voluntary elimination of the antimonopoly violation.

In particular, the bank terminated or amended the agreements singed with the insurance companies to establish co-operation on the mortgage insurance programmes. To prevent unjustified refusals to sign credit agreements because the borrowers have chosen a particular insurance company, the bank has devised and made available to public on its website:

- the bank requirements to insurance companies (general requirements and financial stability);

- the bank requirements to insurance agreements for mortgage crediting;

- the list of documents to be presented by insurance companies in order to verify compliance with the above requirements;

- information on possibility for the borrowers to enter into insurance agreements with any insurance companies if the bank verifies that it complies with the bank requirements.

Upon processing the case, FAS Russia also revealed the agreements that violated Clauses 1, 4, 5 and 6 Article 11 of the Federal Law "On Protection of Competition". The agreements were between "IMPEKSBANK" OJSC and "Raiffeisenbank" CJSC with the insurance organizations that were not respondents to the case - "Renaissance Strakhovanie" Group" Ltd., "First Insurance Company" Ltd., "Uralsib" Insurance Group" CJSC, "Spasskie Vorota" Insurance Group" CJSC, "RK-garant" CJSC, "Ingossrakh" Open Joint-Stock Insurance Company, "RESO-Garantia" Open Joint-Stock Insurance Company, "Zurich.Retail" Ltd., "ERGO-Rus" Closed Joint-Stock Insurance Company, "Continental" Closed Joint-Stock Insurance Company, "Protectum Mobile" Insurance Company" Ltd., "AIG Insurance and Reinsurance Company" CJSC, "Progress-Garant" Insurance Company" OJSC, "Zurich-Rus" Insurance Company" CJSC, "Oranta" Insurance Company" Ltd., "Russky Mir" Insurance Company" OJSC, "National Insurance Group" Open Joint-Stock Insurance Company and "Surgutneftegaz" Insurance Company" Ltd.

Due to the lapse of the period of legal investigation and, as a consequence, inability to ensure the legal rights of the persons - parties to the case (the right to present evidence, study the evidence, and present the arguments on all issues risen in course of the case investigation), the above insurance companies were not respondents to the case.

Taking into consideration the revealed violations of the antimonopoly laws, and according to the procedures specified in the Administrative Regulations on the State Function for Initiating and Processing Cases on Violating the Antimonopoly Legislation of the Russian Federation, the Department for Control over Financial Markets was asked to prepare the relevant documentation on the discovered antimonopoly violations.

Therefore, FAS Russia will make a decision whether "Raiffeisenbank" CJSC, being also as the legal successor of "IMPEKSBANK" OJSC, and the above insurance companies have violated Clauses 1, 4, 5 and 6 Part 1 Article 11 of the Federal Law "On Protection of Competition" as part of separate proceedings.