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. Last Updated: 07/27/2016

Insurers' Names Under Attack

VedomostiRosgosstrakh cannot be sure it will get to keep its well-established name.
More than half the country's insurers may have to change their names within three months or face the possibility of losing their licenses.

In an effort to crack down on fraud, a provision in the recent insurance law will make it illegal for insurance companies to repeat "full or partial" components of competitors' names starting on July 17.

A lack of originality could mean that hundreds of insurers will be forced to dream up new trademarks. Many insurers use variations on words such as strakhovaniye (insurance), and some even share identical names.

The problem will become acute in three months, said Pavel Samiyev, an insurance analyst at Expert Rating Agency, though it remains unclear how the law will be enforced.

The provision that targets copycat companies was originally passed to protect established insurers from low-quality providers, who try to cash in on others' success by setting up shop under similar-sounding names, Samiyev said.

In 2003 there were some 1,400 insurers domestically, according to the All-Russia Insurance Union, and last year the market was worth 472 billion rubles ($16.96 billion).

Market watchers said that the law's provision may affect more than half of the country's insurers, though the exact number was hard to estimate.

Andrei Biryukov, a spokesman for Rosgosstrakh, one of the country's oldest insurers, said the company welcomed the provision because it tried to prevent the copying of trademarks by "unconscientious parties." Nevertheless, he said, "the law has defects."

Some companies, like a St. Petersburg insurer and a company in Moscow use exactly the same name -- Doveriye.

Others use the same words, which may also become illegal, depending on how the new provision is interpreted, said Eduard Grebenshchikov, analyst with the All-Russia Insurance Union.

Like Rosgosstrakh, numerous companies use "strakh" -- shorthand for strakhovaniye -- in their names. It is not clear whether the Federal Service on Surveillance of Insurance Activity, the industry watchdog, will penalize this practice under the new law. The service could not be reached for comment Thursday.

"Rosgosstrakh doesn't plan to make any sort of changes to the company's name," Biryukov said. The interests of "serious" companies should take precedence over "day-old" insurers, he added.

In the case of a conflict, the Federal Service on Surveillance of Insurance Activity will leave it up to insurers to decide which company will needs to rebrand, said Pavel Danilov, head of Metropolis insurer and a member of the National Insurance Guild's expert council.