The concept of the bill on investor categorization has changed again. The Central Bank representative informed that the rules regarding acquisition of investment and endowment policies would be excluded from the edited version. Earlier, professional participants in their letters repeatedly pointed the Bank of Russia at regulatory arbitration if an unqualified investor is allowed to acquire without testing an investment life insurance policy for up to five years with capital protection.
President of the All-Russian Insurance Association Igor Yurgens believes that the protection of life insurance product buyers is at a very high level now due to standards. “It is more logical when insurance products are regulated by insurance legislation. Thus, the law on categorization of investors for life insurance seems unnecessary,” he said. Mr. Yurgens also notes that, unlike many investment instruments, the peculiarity of all life insurance agreements is that the insurer in case of the product with capital protection is obliged to return money to the client, regardless of the profitability of the instruments used by the insurer. An insurer is supposed to be a qualified investor, not a policyholder, according to him.
The representative of the Central Bank informs that the rules for sale of investment life insurance and endowment policies will be regulated by a separate draft amendments that are planned to be prepared later. According to the project manager of All-Russia People’s Front “For the rights of borrowers” Eugenia Lazareva, regular monitoring and work with citizens' appeals show that the level of financial literacy is poor and does not correspond to the current model of the financial market of Russia. “Until recently, according to our data, even understanding the need to familiarize themselves with the document, up to 90% of citizens signed them without looking,” she says. In her opinion, it is necessary for ILI to adopt the model fixed for credits and loans; the most important terms of the contract should be formulated on the first page.
Photos are from open sources.