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24 december 2024, 12:15
The Financial Ombudsman Service (FOS) has revealed that a number of financial institutions have been concluding investment life insurance contracts containing conditions that infringe consumers’ rights.
The distinctive feature of such contracts is that, according to their terms and conditions, the insurer actually assigns to the consumer all the investment risks. If the investment is unsuccessful, the consumer receives less than he or she has paid at the end of the contract.
This provision for the consumer is made possible by the fact that the insurance premium (fee) on such contracts is significantly higher than the sum insured. In the FOS practice, there are cases where the insurance premium was 1,500,000 roubles and the insurance payment for the risks of “survival or death” was only 1,500 roubles, which is a thousand times less than the insurance premium.
When considering disputes from such contracts, Financial Ombudsman invariably decides in favour of the consumer of financial services, stating the nullity of the described condition.
In a number of cases insurers do not agree with the Financial Ombudsman’s decisions on the described category of disputes and apply to the court with a demand to cancel them.
At the same time, the Izmailovsky District Court of Moscow supported the FOS position and rejected the claim of the insurance company JSC “AlfaStrakhovanie” to cancel the Financial Ombudsman’s decision. The court’s ruling emphasises the importance of protecting the rights of consumers of financial services and demonstrates the need to increase transparency and compliance of insurance contract terms and conditions with the requirements of the law, the Financial Ombudsman Service points out.
