In Russia, requirements for insurance of borrowers under loan agreements are being introduced

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AK&M 23 September 2022 17:28

In Russia, requirements for insurance of borrowers under loan agreements are being introduced. The insurance coverage under the life and health insurance policy of the consumer loan borrower and mortgage will have to meet the minimum standard requirements, and the person will receive information about the insurance conditions in an accessible form — in a key information document (CID). This instruction of the Bank of Russia comes into force on October 1, 2022, the Central Bank reports.

Currently, credit product policies contain an extensive list of exceptions, are characterized by a low level of payments, as well as the complexity of the reimbursement procedure. The new rules will allow to increase the consumer value of credit insurance products — for example, the grounds for refusal of insurance payment have been significantly reduced, the maximum period for payment equal to 30 days has been established.

KID in a simple and understandable form will give the borrower information about the insurance coverage, the grounds for refusal to pay, the amount of the premium refund in case of early refusal of insurance, and this will allow the consumer to make an informed decision about the purchase of the policy.