The insurer is in danger of losing its MTPL license

Neither the regulator nor the victims of road accidents can find the Lafort insurance company, which could have collected about UAH 100 million in insurance premiums on the auto insurance market last year. They have few opportunities to receive payments, and market participants are confident that Lafort’s problems are not accidental. They indicate that the regulator does not have an effective system for identifying and solving problems in the market.

During a routine inspection of the Lafort insurance company, one of the largest insurers on the Ukrainian MTPL market, the National Commission that carries out state regulation in the field of financial services markets did not find the company’s office at the place of registration. “Our specialists have drawn up an act and are preparing letters to the tax service and law enforcement agencies,” the regulator’s press service told Kommersant yesterday. Neither the insurer’s office nor its staff were found by the affected clients, who organized a spontaneous meeting near the former central office of the insurance company in Kyiv at 9/10 Dovnar-Zapolskogo Street. 50-60 people exchanged contacts and decided to write collective complaints to the National Financial Services Commission. According to them, the accidents after which they received the right to payment occurred since the end of 2011, most cases in mid-2012.

The insurer's city telephone numbers have been disconnected for several days, the company's website is not working, and a paper notice on the doors of the former office states that victims can submit documents for insurance compensation to Finance Line LLC. This company is located in Kyiv on Sagaidachnogo Street, 10/5A, where the central office of the Dobrobut insurance company used to be. Kommersant was unable to communicate with representatives of Finance Line. An answering machine was activated at the phone number specified in the advertisement: they asked to leave contact information if you wanted to buy a policy and promised that the company’s specialists would “contact you within 24 hours.”

Finance-Line LLC is known for working with clients of problematic insurance companies. At the end of last year, its representatives offered the injured clients of InterTransPolis Insurance Company to assign to them the rights of claim against the insurer. “In return, they promised 30-50% of the compensation amount,” Alexander Penteleyev, who has not been able to receive compensation from the insurance company since the end of 2011, told Kommersant.

IC "Lafort" has existed since 1997, but became active in retail only in 2011. It was difficult for competitors to compete with her in the amount of commissions she offered to agents. “They paid at least 50% of the cost of the policy,” the chairman of the board of one of the insurance companies told Kommersant. Already in the spring of last year, personnel changes began in the company. In February, the chief accountant Svetlana Plokhuta left Lafort at her own request; in April, the chairman of the board, Galina Pishakova, left, after which from April to October the company was headed at different times by Irina Serbina, Sergei Opalatenko and Yulia Fedina. Some only worked for a month. On October 9, 2012, Yuri Kindzersky was appointed chairman of the board. Kommersant was unable to contact him yesterday: his mobile number is no longer in service.

It is noteworthy that back in the first quarter of 2012, Lafort received “excellent” ratings from the Motor (Transport) Insurance Bureau (MTIBU), which analyzes the financial performance of the bureau’s member insurers and the level of settlement of insurance claims. However, based on the results of the second and third quarters of last year, the bureau did not publish information about the company, explaining this by the fact that “an additional analysis of the indicators was carried out.”

IC "Lafort" did not advertise its successes in the MTPL market. But the MTIBU report for the nine months of last year states that the company took fifth place in terms of the volume of premiums raised under MTPL and eighth in terms of the number of policies sold. The bureau does not disclose the figures, but the report indicates that AXA Insurance was ahead of Lafort in terms of premiums, and the Ukrainian Fire Insurance Company took the next position - sixth. According to Insurance Top magazine, AXA Insurance collected UAH 84.8 million in premiums from compulsory motor liability insurance in January-September, and Ukrainian Fire Insurance Company collected UAH 76 million in premiums. Thus, “Lafort” received from clients from UAH 77 million to UAH 84 million, which means that at the end of 2012, its portfolio of premiums from “Avtograzhdanki” could easily exceed UAH 100 million.

At the same time, IC Lafort was not even among the top ten companies in terms of the volume of payments, having compensated victims less for the nine months of 2012 than IC INGO Ukraine. This company took tenth place in this indicator (UAH 22.37 million). “There were many complaints about the work of this insurer. As a result, back in November, the MTIBU risk committee decided not to issue new forms of compulsory motor liability insurance policies to Lafort and to order an audit of the company,” said Natalya Gudyma, president of the League of Insurance Organizations, who is a member of the committee on financial risks of MTIBU. However, Lafort could sell policies that it had previously received from MTIBU. The insurance company loses this right only after expulsion from the bureau or cancellation of the license. A little later, on December 6, the coordination council of MTIBU decided to “request from IC Lafort certificates (extracts—Kommersant”) from banking institutions on the availability of funds in the company’s current and deposit accounts as of July 3, July 10, and September 12 and October 16, 2012" (Kommersant has a copy of the protocol). However, the insurance company never provided this information to MTIBU.

The National Financial Services Commission told Kommersant yesterday that on March 14, at a meeting of the commission, the issue of stopping the company’s license for compulsory motor liability insurance will be considered. It is possible that the situation will be similar with other licenses. It was not possible to get a comment from MTIBU yesterday: the bureau’s press service promised all day in response to Kommersant’s questions to formulate an official position in order to publish it on the official website. However, there was no official reaction until the end of the day.

Insurers recall that events around Insurance Traditions Insurance Company developed according to the same scenario in 2009, and around Investservice Insurance Company, InterTransPolis and Dobrobut in 2011-2012. MTIBU and the National Financial Services Commission intervened in the process even when it was difficult for companies to help, despite the fact that there are about 20 reasons for canceling a license for compulsory civil liability insurance of car owners. “There can be only one way out of the situation - tying up the reserves of insurers. At the general meeting of MTIBU members, we have already decided to create a fund for this, into which insurance companies will transfer a share of collected premiums, all that remains is to implement it. And although not all market participants, especially with foreign shareholders, support such an initiative, in the current situation this is the only way out,” said Vladimir Ganchak, Chairman of the Board of IC Globus.

Victoria Rudenko

Newspaper "Kommersant Ukraine" No. 35 dated 03/01/2013, page 1

Authors:

Victoria Rudenko

Themes:

Insurance business

"Laforte" disappeared from the scene