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Borrower entitled to refund for insurance policy: regulator explains

14 July 2021

Borrowers who repaid their debt early are entitled to a refund of the insurance premium on all insured risks (except when the insured event has materialised). The Bank of Russia has released explanations to this effect to all insurance companies.

The regulator detected cases of insurers refunding only some part of the risk premium (in a contract, such risk is related to the borrower's loan obligations) when the insurance contract is fully terminated. Risk categorisation is discretional. Some individuals filed complaints about non-refunds of premium on income loss / disable condition risks, explained by the fact that they were not among insured risks under the loan contract.

The Bank of Russia warns that partial refund of the insurance premium in this case comes as breach of consumer rights and legitimate interests and is therefore intolerable.

Preview photo: Mikael Damkier / Shutterstock / Fotodom