Bank of Russia formalises requirements for payment of investment income from life insurance
Insurance companies should pay out additional investment income under voluntary life insurance contracts regardless of sanctions. Such requirements for investment and endowment life insurance (ILI and ELI) products are written in the draft Bank of Russia ordinance that amends the current procedure.
The document is aimed at increasing the value of such insurance products for consumers and protecting their interests. Insurers should not shift the risks of sanctions to customers and refuse to pay investment income, even if they do not receive the required amounts from counterparties due to blocked payments on foreign assets.
In addition, the document provides for the establishment of a maximum period for insurance payments: 30 days from the date of receipt of applications from customers. It is also planned to change the approach to calculating insurance payments for the risk of death, which will take into account the current economic situation.
In ILI and ELI contracts, the insurance payment is currently defined as the contractual insurance premium, increased by a rate, the amount of which depends on the age of the insured person, the term of the contract, and the method of payment of the premium. Additionally, it is proposed to make this rate variable and link it to the Bank of Russia key rate. The new approach will protect the interests of policyholders, as insurers will be obliged to grant them more favourable conditions.