Saratov deputy suspended over Sberbank insurance

Saratov deputy suspended over Sberbank insurance
Denis Davydov

The deputy violated the law by buying life insurance, Saratov region prosecutors believe.

Deputy of the Saratov Municipal District (Saratov region) Denis Davydov was dismissed following local prosecutors’ investigation. The deputy violated the federal law No. 79-FZ by buying life insurance, according to prosecutors’ statement.

A portion of money was transferred to foreign companies under the deputy’s insurance agreement; that is what sparked prosecutors’ interest. Such actions are against the law that prohibits use of foreign financial instruments, prosecutors noted.

This is a unique case, according to insurance market players interviewed by RBC. In Russia, there are a lot of financial instruments indirectly related to foreign markets, experts note. This precedent makes it dangerous to use them. The Union of Professional Insurance Market Participants represented by the Union of Russian Insurance Companies has already stated the issue has to be dealt with.

The deputy bought the Smartpolis life insurance from Sberbank Strakhovanie Zhizny in 2013, according to RBC’s source familiar with findings of the inspection against Davydov.

Davydov was entitled to additional investment income payments under a number of investment strategies, according to the insurance plan. The deputy could decide the amount of payments to receive from a number of instruments tied to different indicators (RTS index, gold, stock). Davydov chose gold. It meant his investment would be used to buy futures for precious metals at the London Stock Exchange.

This means Denis Davydov used his money to do business with foreign companies in violation of the Russian federal law, prosecutors note.

Sberbank Strakhovanie Zhizny did not immediately respond to a request for comments.

Prosecutors acted irrationally, the Union of Russian Insurance Companies believes. The insurance the deputy bought does not meant becoming an investor. The only thing insured person gets after deciding where to invest is indirect income from the investment made, the Union of Russian Insurance Companies noted.

It is worth mentioning that Davydov is a United Russia member. United Russia suspended his membership after prosecutors began investigating him.

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