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26 february 2025, 14:04
In the Financial Ombudsman’s practice, as it was previously stated1, there have been disputes arising from investment life insurance contracts, under the terms of which the insurance premium (fee) exceeds the sum insured by several orders of magnitude.
The particular feature of such contracts is that the insurer in fact imposes all the risks of investment on the consumer. In a case of unsuccessful investment the consumer receives at the end of the contract term a smaller sum than he or she has paid.
In the disputes described above, the Financial Ombudsman stated that such contractual terms were null and void due to their inconsistency with the essence of legislative regulation and made decisions in favour of consumers. This position was upheld2 by the Izmailovsky District Court of Moscow when AlfaStrakhovanie-Life LLC challenged those decisions.
A similar position was taken3 by the Oktyabrsky District Court of the Primorsky Territory when considering civil cases on claims by AlfaStrakhovanie-Life LLC for cancellation of two Financial Ombudsman’s decisions on similar contracts.
In the cases considered by the Oktyabrsky District Court, the aggregate insurance premium for the risks of “death” and “survivorship” under the disputed contracts totalled just under RUB 1,500,000. According to the Bank of Russia’s Directive No. 5968-U, the insurer was obliged to set the insurance amount for these risks at least equal to the insurance premium.
However, the terms and conditions of the contracts did not comply with the above requirements of the Bank of Russia; the insurance amount was RUB 1,500, which is almost one thousand times less than the insurance premium. At the same time, the investment result did not cover the difference between these amounts, which led to property losses of consumers.
Olga Kraynova, head of the Ombudsman for financial services consumers support Service (OFSC), says: “We hope that these court decisions will encourage insurance institutions to exclude from their practice the conclusion of contracts with consumers under similar terms and conditions.”
