Insurance companies refuse to sell ILI policies for less than 1.5 million rubles

Insurance companies are reviewing the product lines of investment life insurance (ILI) policies, refusing to enter into contracts where the premium is below 1.5 million rubles. This is due to the entry into force of new requirements of the Central Bank, according to which for contracts where the premium is lower, the obligations of insurers under ILI increase significantly.

In the second quarter of 2024, insurance companies began to refuse to sell investment life insurance (ILI) policies to clients where the insurance premium was below 1.5 million rubles. This follows from Kommersant’s operational survey of market participants. In particular, Rosgosstrakh Life has currently suspended sales of investment life insurance programs with a check of less than 1.5 million rubles, the company said. According to Denis Bilyk, director of partnership sales development at Zetta Life Insurance, the company focused on offering life insurance with an insurance premium of over 1.5 million rubles. for the wealthy client segment.

Some cooling of insurance companies towards the mass product was caused by the entry into force on April 1 of changes to the Central Bank instruction “On the minimum (standard) requirements for the conditions and procedure for implementing voluntary life insurance…”. In it, the regulator established rather stringent requirements for ensuring payments under ILI policies of up to 1.5 million rubles. In particular, the insured amount for survival risk is determined by the product of the total insurance premium under the contract by a coefficient, the value of which depends on the key rate. Thus, for the current rate of 16% when paying the insurance premium in installments, the coefficient is 3.6–3.7 (depending on the age of the insured person) for an insurance period of up to three years; for a period of three to five years, the coefficient is 7.6–7.8. For a one-time payment of the premium, the coefficient ranges from 1.5 to tens of units (depending on the age and term of the contract). At the same time, for the key rate of 8%, when paying the premium in installments, the coefficient is reduced to only 3–3.1, and when paying the premium in a lump sum, from 1.2 to 78.

According to experts and market participants, compliance with these requirements is difficult. According to VSS Vice President Gleb Yakovlev, the instruction actually establishes a requirement for a minimum guaranteed return on life insurance contracts for multi-year terms, depending on the level of the key rate. At the same time, according to the expert, no one has canceled the payment of additional investment income (AIT) under ILI agreements, that is, at the end of the agreement, the client must pay the amount he paid under the agreement, multiplied by a coefficient plus the AIT, depending on how the underlying asset performed. Moreover, for contracts where the premium is above 1.5 million rubles. the old requirements apply, he notes. These requirements make significant changes to the economics of these products, increasing the amount of the guarantee and thereby reducing the part of the premium that can be used to implement the client’s investment strategies, explains partner B1 Tatyana Samsonova.

For the mass segment, these changes will likely lead to increased transparency and customer value of the product, but for the insurer, these changes are likely to make the product unprofitable, Ms. Samsonova believes. According to Alexander Tsyganov, a professor at the Financial University under the Government of the Russian Federation, banks’ appetite for selling ILI policies, which remained a high-margin instrument for them, may decrease.

The Central Bank did not respond to Kommersant’s request.

Yulia Poslavskaya