OREANDA-NEWS. May 13, 2009. The Federal Antimonopoly Service (FAS Russia) found that "Absolute Bank" Share-Holding Commercial Bank (CJSC) and 24 insurance companies violated Article 11 of the Federal Law "On Protection of Competition". The bank and insurance companies violated the law by entering into agrements on the services of Auto Loan and Mortgage Loan programmes, that led (could have led) to restriction of competition, including economically and technologically unjustified refusals to sign contracts with certain buyers and sellers, reported the press-centre of FAS Russia.

The insurance companies in question included "Ingosstrakh" Open Joint-Stock Insurance Company, "Renaissance Strakhovanie Group" Ltd., "ROSNO" OJSC, ОАО "Capital Strakhovanie" OJSC, "Voenno-Strakhovaya Compania" OJSC, "RESO - Garantia" Open Joint-Stock Insurance Company, "OSNOVA" Industrial Insurance Group" Ltd., "Rosgosstrakh - Ural" Ltd., "Rosgosstrakh - Stolitsa" Ltd., "Rosgosstrakh -Dalny Vostok" Ltd., "Rosgosstrakh - Severo-Zapad" Ltd., "Rosgosstrakh - Sibir" Ltd., "Rosgosstrakh - Yug" Ltd., "Rosgosstrakh -Povolzye" Ltd., "Rosgosstrakh - Accord" Ltd., "Rosgosstrakh - Tatarstan" Ltd., "Rosgosstrakh - Tsentr" Ltd., "Standart-Rezerv" Closed Joint-Stock Insurance Company, "ISK Evro-Police" Ltd., "Zurich. Retail" Insurance Company" Ltd., "Zurich" Insurance Company" CJSC, "Rossia" Open Joint-Stock Insurance Company, "AlphaStrakhovanie" OJSC and "SOGAZ" OJSC.

In course of the case investigation, "Absolute Bank" Share-Holding Commercial Bank (CJSC) and insurance companies presented documents confirming voluntary elimination of the antimonopoly violations under Clause 1 Part 1 Article 48 of the Federal Law "On Protection of Competition".

To prevent unreasonable refusals to enter into credit agreements on the grounds that the borrowers selected a certain insurance organisation, "Absolute Bank" Share-Holding Commercial Bank (CJSC) devised and placed on its web site the following documents, accessible to the public:

- Bank requirements to the insurance companies and the list of documents to be submitted by the insurance companies to enable verification of compliance with the mentioned requirements;
- Information on the possibility of the borrowers to enter into insurance agreements with any insurance organisations if it is established that it meets the bank requirements.

As "Absolute Bank" Share-Holding Commercial Bank (CJSC) and the above insurance companies voluntarily eliminated the antimonopoly violations and its consequences, FAS Russia concluded that there were no grounds to issue a determination to the bank and the insurance organisations on stopping competition-restricting agreements and exercising actions towards protecting of competition.

Violating Article 11 of the Federal Law "On Protection of Competition" constitutes the grounds for imposing administrative charges under Article 14.32 of the Code of the Russian Federation on Administrative Violations. According ot the Notes to Article 14.32, a person who voluntarily reported to the antimonopoly authority about entering into a competition-restricting agreement, which is prohibited by the antimonopoly legislation of the Russian Federation, and refused to participate or further participate in it, and also presented available information (data) to ascertain the fact of such an agreement, is relieved form administrative liability.

Having processed the case, the FAS Russia's Commission also concluded that "Absolute Bank" Share-Holding Commercial Bank (CJSC) and insurance companies violated Clause 5 Part 1 Article 11 of the Federal Law "On Protection of Competition" by entering into agreements that result or can result in imposing conditions of a mortgage loan agreement upon a borrower, which are unfavourable to the borrower or are irrelevant to the subject matter of the agreement.

Apart from insuring the mortgage property, the agreements between the bank and the insurance companies on cooperation under the mortgage crediting programme provide for mandatory life and title insurance by the borrowers, which can be considered as an unfavourable condition or a condition that is irrelevant to the subject matter of the agreement for mortgage crediting.

Based on this, the FAS Russia's Commission found violations of the antimonopoly legislation on the market of banking services.

Under Part 3 Article 40 of the Federal Law "On Protection of Competition", violations committed by credit organisations on the market of banking services must be considered by a commission incorporating on parity basis representatives of the Central Bank of the Russian Federation.

Therefore, the decision whether "Absolute Bank" Share-Holding Commercial Bank (CJSC) and insurance companies violated the antimonopoly legislation in course of their cooperation related to mortgage crediting will be made by a joint commission of FAS Russia and the Bank of Russia.