OREANDA-NEWS. September 23, 2009. The Commission of the Federal Antimonopoly Service, that on parity basis includes officers of the antimonopoly authority and the Central bank of Russia, terminated antimonopoly proceedings against "Raiffeisenbank" CJSC and ten insurance companies, reported the press-centre of FAS Russia:

"AlphaStrakhovanie" OJSC, "Rosgosstrakh-Stolitsa" Ltd., "RK-Garant" Insurance Company" CJSC, "Standard-Rezerv" Closed Joint-Stock Insurance Company, "Voenno-Strakhovaya Kompania" OJSC, "Zurich. Retail" Insurance Company" Ltd., "ROSNO" OJSC, "Grouppa Renessance Strakhovanie" Ltd., "Ingosstrakh" Open Joint-Stock Insurance Company and "Progeress-Garant" Insurance Company" OJSC, without issuing a determination.

The Commission arrived to that decision due to voluntary elimination by the bank and insurance companies of the antimonopoly violations and their consequences related to cooperation under mortgage loan programmes.

The case was initiated upon the Commission's findings on another antimonopoly case against "Raiffeisenbank" CJSC and "Voenno-Strakhovaya Kompania" OJSC, "RK-Garant" Insurance Company" CJSC, "AlphaStrakhovanie" OJSC, "ROSNO" OJSC in relation to their cooperation in providing mortgage loan facilities. FAS Russia made a decision on the case on 26th September 2008.

Due to consolidation of "IMPEXBANK" OJSC and "Raiffeisenbank" CJSC, the Commission investigated the agreements that both "IMPEXBANK" OJSC and "Raiffeisenbank" CJSC concluded with insurance companies before and after joining with "IMPEXBANK" OJSC.

Under the agreements, when the bank grants mortgage loans to the borrowers, apart from the risks of loss/ damages to the pledged property, the borrowers were obligated to insure the risks of death/ disability of the borrower as well as termination/ restriction of the ownership rights of the borrower for the pledged property. Insurance requirements to the borrowers also included insurance of the above risks in the insurance companies accredited or approved by the bank. Such insurance companies were selected through close tenders on the basis of bank requirements to insurance companies made in private.

Having investigated the case, the Commission arrived to the following conclusions:
- Agreements between "IMPEXBANK" OJSC and "Rosgosstrakh-Stolitsa" Ltd., "Standard-Rezerv" Closed Joint-Stock Insurance Company and "Zurich. Retail" Insurance Company" Ltd. contravened Clause 4 Part 1 Article 11 of the Federal Law "On Protection of Competition", because they led or could have led to economically and technologically unreasonable refusals to enter in agreements with certain buyers (clients);

- Agreements between "IMPEXBANK" OJSC and "AlphaStrakhovanie" OJSC, "Rosgosstrakh-Stolitsa" Ltd., "RK-Garant" Insurance Company" CJSC, "Standard-Rezerv" Closed Joint-Stock Insurance Company, "Voenno-Strakhovaya Kompania" OJSC, "Zurich. Retail" Insurance Company" Ltd. contravened Clause 5 Part 1 Article 11 of the Federal Law "On Protection of Competition" because they led or could have led to imposing unfavourable conditions of mortgage loan agreements upon borrowers or conditions irrelevant to the subject matter of the contract;

- Agreements between "Raiffeisenbank" CJSC and "Zurich. Retail" Insurance Company" Ltd., "Grouppa Renessance Strakhovanie" Ltd., "Ingosstrakh" Open Joint-Stock Insurance Company and "Progeress-Garant" Insurance Company" OJSC contravened Clauses 4 and 5 Part 1 Article 11 of the Federal Law "On Protection of Competition" because they led or could have led to economically and technologically unreasonable refusals to enter in agreements with certain buyers (clients) as well as to imposing unfavourable conditions of insurance agreements upon the borrowers;

- Agreements between "Raiffeisenbank" CJSC and "Voenno-Strakhovaya Kompania" OJSC, ОАО "РОСНО", "AlphaStrakhovanie" OJSC, "Zurich. Retail" Insurance Company" Ltd., "Grouppa Renessance Strakhovanie" Ltd., "Ingosstrakh" Open Joint-Stock Insurance Company and "Progeress-Garant" Insurance Company" OJSC contravened Clause 5 Part 1 Article 11 of the Federal Law "On Protection of Competition" because they led or could have led to imposing unfavourable conditions of mortgage loan agreements upon borrowers and conditions irrelevant to the subject matter of the contract.

As part of the case finalized on 17 17th September 2009, the bank devised and introduced alternative products under mortgage loan programmes, which do not require insuring other risks apart from the risks of losing / damaging the pledged property.

In this connection, "Raiffeisenbank" CJSC and insurers terminated or amended the cooperation agreements under the mortgage loan programmes.

Also the bank published a notice for the borrowers with existing mortgage loan the bank website. The borrowers, with existing mortgage loan are informed that if they do not wish to insure other risks rather than the risks of losing / damaging the pledged property, and if they agree to the related increase of the interest rate by 3.5% per annum, they can file a written statement to the bank about changing the appropriate lean conditions.

In this case the borrowers will need to sign additional agreements about changing the loan and collateral documentation and register the documents according to the statutory procedures of the Russian Federation, and conclude an agreement for insuring the risks of losing /damaging the pledged property or made appropriate changes to the existing insurance agreement.