Borrowers have right to select loan insurers: Bank of Russia explains

The regulator has sent an information letter to this effect to market participants. The clarifications stem from the fact that the Bank of Russia has identified instances where lenders stipulate in agreements that a lower interest rate is subject to making insurance contracts with specific companies, which are very often affiliated with such banks.

The regulator considers this practice unacceptable and reminds borrowers of the right to have their life and health insured independently from executing a loan agreement.