OREANDA-NEWS. August 24, 2011. Moscow Arbitration Court upheld the determination of the Federal Antimonopoly Service (FAS Russia) that fined “Retail Crediting Company” CJSC (“KRK” CJSC) for price collusion on the market of insurance services, reported the press-centre of FAS Russia.

On 12th April 2011, FAS Russia fined “KRK” CJSC over 7 million Rubles under Article 14.32 of the Code of the Russian Federation on Administrative Violations for anticompetitive conduct on the market of insurance services (the total fines imposed upon all price cartel participants exceeded 115 million Rubles).

In 2010, FAS Russia revealed price cartel on the market of vehicle insurance between KRK group of persons comprising: “Retail Crediting Company” CJSC, “KRK-Insurance” Ltd. and “KRK” Commercial Bank” OJSC as well as six insurance companies: “AlphaStrakhovanie” OJSC, “MSK”Insurance Group” OJSC, “Rosgosstrakh” Ltd., “Admiral” Insurance Group” Ltd., “Renaissance” Insurance Group” Ltd. and “Russkaya” Insurance Company” OJSC.

FAS Russia established that “KRK” CJSC and insurers concluded anticompetitive agreements that fixed the insurance rate at 9.99% for voluntary motor-vehicle insurance (KASKO) for the whole period of a credit agrement and a security agreement. When a KASKO agreement was concluded for the subsequent years, the insurance rate was not supposed to change as the above entities failed to take into account, in particular, vehicle wear and tear and accident-free driving. This condition was disadvantageous for the clients of “KRK” CJSC and the borrowers of “KRK” Commercial Bank” OJSC and, as a consequence, made insurance services more expensive.

The case against the financial organisations was initiated upon numerous complaints from physical persons regarding retail sale of motor vehicles under the conditions of payment by installments, crediting and insurance. In course of an unscheduled inspections of bank branches, FAS experts discovered electronic communications between the insurers and the bank, which confirmed that the companies formed a cartel on the market of insurance services.

Having investigated the case, FAS found that “KRK” CJSC, “KRK-Insurance” Ltd. and “KRK” Commercial Bank” OJSC as well as six insurance companies: “AlphaStrakhovanie” OJSC, “MSK”Insurance Group” OJSC, “Rosgosstrakh” Ltd., “Admiral” Insurance Group” Ltd., “Renaissance” Insurance Group” Ltd. and “Russkaya” Insurance Company” OJSC violated Part 1 Article 11 of the Federal Law “On Protection of Competition”.

Upon recognising the violation of the antimonopoly law, FAS initiated administrative proceedings against KRK group of persons.