The citizens can count on compensation in the event of the insurance company bankruptcy. The coverage of 1.4 million rubles will only apply to the actual investments of the client, and not investment income under the policy.
Deposit Insurance Agency (DIA) will make the payments from the guarantee fund collected of the insurers’ contributions. It is assumed that all market participants will be included in the guarantee system. The changes are planned for 2021.
The volume of life insurance premiums amounted to 452.4 billion rubles in 2018, but it was investment insurance that began to slow down. The investment life insurance segment began to shrink against rising deposit rates, the Central Bank noted. The life insurance market showed the first falling in fees for ten years in 2019. The life insurance contributions have fallen by 22.8% to 98.5 billion rubles in annual terms in the 2nd Q 2019. The sharp decline is due to the fact that customers are not satisfied with the level of policy profitability, the Bank of Russia stated. In September Sergei Shvetsov, the first deputy chairman of the Central Bank, admitted that investment insurance could be rated as a murky product.
The All-Russian Union of Insurers (ARIA) supports the idea of guaranteeing investments in life insurance policies, according to its president Igor Yurgens. However, the Central Bank should discuss with market participants how much premiums the insurers will have to make to the new guarantee fund. RBC sent inquiries to the Bank of Russia, Ministry of Finance and DIA.
Photos are from open sources.