OREANDA-NEWS. May 12, 2009. The Federal Antimonopoly Service (FAS Russia) terminated the proceedings initiated against "CREDIT EUROPE BANK" CJSC and insurance companies for violating Article 11 of the Federal Law "On Protection of Competition", reported the press-centre of FAS Russia.

CREDIT EUROPE BANK" CJSC signed agreements with the following insurance companies: "Generalny Strakhovoi Aliance" Ltd., "Russkaya Strakhovaya Compania" OJSC, "GUTA - Strakhovanie" CJSC, "Zurich. Retail" Insurance Company" Ltd., "Rosgosstrakh - Tatarstan" Ltd., "Rosgosstrakh - Stolitsa" Ltd., "Rosgosstrakh -Povolzye" Ltd., "Rosgosstrakh - Accord" Ltd., "Rosgosstrakh - Sibir" Ltd., "ORANTA" Insurance Company" Ltd., "АSKО" Insurance Group" Ltd., "ASOL" Insurance Company" CJSC, "Yugoria" State Insurance Company" OJSC, "Credit Evropa Life" Insurance Company" Ltd., "Voenno-Strakhovaya Compania" OJSC, "SOGAZ" OJSC, "Renaissance Strakhovanie Group" Ltd., "Ingosstrakh" Open Joint-Stock Insurance Company and "Companion" Insurance Group" Ltd.

The case was initiated upon a FAS Russia's inspection to verify whether "CREDIT EUROPE BANK" CJSC complied with Article 11 of the Federal Law "On Protection of Competition" in its work with insurance organizations.

The elements of violating the antimonopoly law by "CREDIT EUROPE BANK" CJSC were seen in signing written agreements with insurance companies under the Auto Loan and Mortgage Loan programmes of "CREDIT EUROPE BANK" CJSC, that result or can result in restriction of competition, including economically and technologically unjustified refusals to sign contracts with certain physical persons and imposing unfavourable agreement conditions upon physical persons or conditions irrelevant to the subject matter of the agreement.

Investigating the case, FAS Russia established that in October 2006 "CREDIT EUROPE BANK" CJSC (former "FINANCEBABK" CJSC) introduced an Auto Loan programme for physical persons that did not require that the vehicles must be insured in certain insurance organisations. Therefore, the bank has alternative auto loan products and the borrowers can obtain credits with both a mandatory insurance and without the need to buy insurance from a certain insurance organizations.

In course of the case investigation, "CREDIT EUROPE BANK" CJSC presented evidence that while exercising the auto loan programmes the bank accepted from the borrowers, in particular, polices of the insurance organisations not included in the list of insurance companies recommended by the bank.

"CREDIT EUROPE BANK" CJSC also revised the list of its requirements for accreditation of insurance companies for cooperation within the framework of various credit programmes. FAS Russia believes that those requirements comply with the antimonopoly legislation.

The list of insurance companies that meet the bank requirements was expanded and is publicly accessible at the Internet site of "CREDIT EUROPE BANK" CJSC.

In view of the above, FAS Russia terminated the proceedings in the absence of antimonopoly violations in the bank's cooperation with the insurance companies under the Auto Loan programmes.

However, processing the case, the FAS Russia's Commission concluded that "CREDIT EUROPE 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. Implementing the credit programme, the bank suggested to the borrowers to buy insurance polices only from the insurance organisations indicated by the bank, which restricted its clients - physical persons in possibility of making their choice independently.

Accordingly, the FAS Russia's Commission found violations of the antimonopoly legislation committed in particular 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. The decision whether ""CREDIT EUROPE 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.