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29 september 2023, 12:58
An insurance company had unlawfully underpaid its client a CMTPL insurance indemnity taking into account depreciation, thus understating the amount to be paid. The Financial Ombudsman obliged the company to pay the sum without taking into account the depreciation and charged a penalty. The first-instance court deemed the insurer’s actions to be lawful and cancelled the Financial Ombudsman’s decision. However, on appeal the first-instance court’s decision was overturned and the Financial Ombudsman’s decision was left as it stood.
Gist of the Case
A resident of the Tula region had an accident and applied to his insurance company for CMTPL insurance payout. The company gave a referral for repair, but the insured was unable to get his car repaired at a service station. Without obtaining the customer’s consent the insurance company decided on its own to pay the insurance compensation as cash. The client received a payout of 260,986 roubles including depreciation.
Disagreeing with the amount paid, the customer appealed to the Financial Ombudsman with a claim for additional payment without taking depreciation into account and for a penalty for violation of the insurance indemnity payment term.
The Financial Ombudsman’s position
Financial Ombudsman Denis Novak found that the financial institution had provided the applicant with a referral for repair to a car service station, but the repair had not been carried out for reasons beyond the applicant’s control. The financial institution had decided on its own to pay 260,986 roubles, taking into account depreciation.
“Circumstances by virtue of which the financial institution had, without the customer’s consent, the right to replace the arrangement and payment of the restoration repair with an insurance payment, were not found valid during the consideration of this appeal. In such a case, the customer is entitled to count on the payment without taking into account the depreciation,” Denis Novak noted.
The Financial Ombudsman arranged an independent expert examination. As a result, Denis Novak recovered by his decision an additional payment of 125,982 roubles from the insurance company, as well as a penalty of 54,807 roubles.
The Court’s position
The Suvorovsky Interdistrict Court of the Tula Region, having come to the conclusion that the financial institution had duly fulfilled its obligations and therefore there had been no grounds to recover the amounts without taking depreciation into account, overturned the Financial Ombudsman’s decision. In addition, the court ruled that the Financial Ombudsman’s independent expert examination had been carried out in violation of the Unified Guidelines.
However, the Tula Regional Court upheld the Financial Ombudsman’s appeal, overturned the first-instance court’s decision, and left the Financial Ombudsman’s decision as it stood. The court agreed with the Financial Ombudsman’s conclusions regarding the payment without taking depreciation into account. In addition, the court appointed its own expert examination, which confirmed the correctness of the conclusions set out in the Financial Ombudsman’s decision.
