OREANDA-NEWS. May 13, 2009. The Government of the Russian Federation approved No.386 Decree "On Approving General Exceptions for the Agreements between Credit and Insurance Organisations", developed by the Federal Antimonopoly Service (FAS Russia) in accordance with Part 2 Article 13 of the Federal Law "On Protection of Competition" to enhance competition on the market of credit insurance, reported the press-centre of FAS Russia.

The Decree introduces conditions of allowability of the agreements between credit and insurance organisations, which will be valid for the next five years. Such conditions include, in particular: types of acceptable agreements, conditions of which cannot be considered allowable for those agreements; mandatory conditions for developing competition that must be included in the agreements; and other conditions that the agreements must comply with.

The agreements between credit and insurance organisations that meet the requirements specified by the Decree for the given type of agreements, do not contain unacceptable provisions and include other provisions that do not restrict competition, are considered allowable and do not incur administrative or criminal liability.

The Decree was adopted in connection to the law enforcement practice developed upon investigations of activity and relations between credit and insurance organisations in insuring the borrowers' risks.

Granting the credits, credit organisations practically force the borrowers to use certain insurance companies for insuring the risks. Without an insurance contract with the credit organization, with whom the bank has a cooperation agreement or an agency agreement, the banks refuse to grant credits.

Thus, insurance companies that do not have such agreements with credit organisations are deprived of a possibility to act as insurers for insuring the borrowers' risks, which restrict competition on the insurance market.