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Access to insurance investment products for non-professionals will be closed in Russia

The Bank of Russia has prepared a draft law that applies rules on investor qualifications to the insurance product market, RBC reports.
Access to insurance investment products for non-professionals will be closed in Russia

First Deputy Chairman of the Bank of Russia Vladimir Chistyukhin said that investment (ILI) and endowment (ULI) life insurance “is actually an analogue of complex [financial] products.” In this regard, the regulator sees the need to ban the sale of investment life insurance and endowment life insurance to unqualified investors.

According to him, the regulator is issuing a normative act, “which will severely restrict insurance companies from selling low-quality products”, alongside with the bill.

The Central Bank announced the need to limit the sale of investment life insurance policies to unprepared investors back in January 2021. A year ago, the regulator sent a letter to insurance companies recommending against selling life insurance policies with a one-time premium payment or payments depend on the value of assets intended for qualified investors only. The Central Bank also outlined a number of restrictions regarding the sale of investment life insurance policies and certain types of endowment life insurance contracts.

Mandatory testing for unqualified investors wishing to work with complex financial instruments was introduced as of October 1, 2021. According to the results as of the 4th Q, 2.8 million investors passed the test, Vladimir Chistyukhin informed. 67% passed the test at first attempt. 

Source: https://www.rbc.ru/finances/15/02/2022/620b5c679a794758f8a36a43

Photos are from open sources.

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