Builder insurance: list of insurance companies. Developer civil liability insurance under 214-FZ

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Today, civil liability insurance is very common. It is legally assigned to everyone related to hazardous facilities (transport, construction, etc.), liability for possible harm to other persons or organizations.

Since 2014, developers of multi-apartment complexes have been obliged to insure their civil liability to buyers (that is, to equity holders). True, with some reservations: construction projects must comply with the norms of the law FZ-214, and permission to conduct construction work was received no earlier than 2014.

Regulatory framework

All legislative formalities on civil liability insurance of the developer are prescribed in 214-FZ:

• Article 15.1 is devoted to securing the obligations of a construction company through a bank guarantee;
• Article 15.2 reveals the conditionsbuilder's liability insurance.

What's new?

Thanks to the created conditions, developers have the right to conclude agreements with equity participation (DDU), and apartments are sold only with insurance.

Compulsory developer insurance exists in two forms:

1. Through a bank guarantee (subject to certain conditions).
2. Through drawing up a civil liability insurance contract.

Moreover, the developer has the right to conclude it both with the Mutual Insurance Society of Developers (OVS), and with any insurance company. This procedure is carried out only at its own expense and (mandatory condition!) Before signing the first equity participation agreement (DDU). Each shareholder must be familiar with the terms and conditions of insurance.

Rosreestr has been appointed the supervisory authority over the actions of construction companies in the legal field. Thus, DDUs without developer liability insurance are simply not registered.

Basic concepts

The beneficiary of any of the above types of insurance are equity holders. In the event of an insured event, it is they who receive monetary compensation. The beneficiary may be replaced under the terms of the contract. The insurer must be notified of this in writing.

Insured event - declaring the developer bankrupt or violating any of his obligations when transferring the finished object to the shareholder. Moreover, non-compliance must beconfirmed in court (according to the statement of claim of the shareholder). This may be a decision to recover collateral, or an arbitration court decision to declare the developer bankrupt, as well as to open a tender for external management, an extract from the register on the return of funds: composition, amount and sequence of execution.

Minimum insurance benefit – the amount calculated from the share agreement price. But it cannot be less than the product of the area of the apartment by the average cost per square meter of housing in a particular region.

The term of the insurance contract is set based on the timing of the construction of the house. Usually indicated in the project documentation and share agreement.

Insurance contract

The developer's insurance contract starts from the moment of state registration of the equity participation agreement and is valid until the date of transfer of the residential premises specified in the DDU.

The insurance contract must stipulate the right of the beneficiary to receive insurance compensation for an event that occurs no later than two years from the date of transfer of the residential premises specified in the shared participation agreement.

The developer is obliged to conclude civil liability contracts for all premises in the building under construction, and before the opening of the first contract with the shareholder, and not before the start of construction work. Lawyers recommend that equity holders first familiarize themselves with the list of insurance companies for insuring developers, so as not to get into trouble.

The minimum amount of insurance is calculated by multiplying the square meter of the average market value of housing by the area of the share object.

Protection Enhanced

Thus, the developer's insurance protects the interests of equity holders, along with other provisions of 214 of the Federal Law. At the same time, the emphasis is on the safety of funds invested in construction. That is, in case of non-fulfillment by the developer of its obligations, a monetary insurance payment, as well as a pledge of land, acts as a measure to ensure compensation for possible harm.

Payment of compensation is entrusted to the insurer. This could be an insurance company, a bank, or a Mutual Insurance Company, in other words, the developer's chosen guarantor. A bank guarantee is a very expensive pleasure today, and not every credit institution provides such a service. Therefore, most often, developers turn to either an insurance company or an OBC.

Builder liability insurance: insurance companies

The developer is obliged to conclude a developer's liability insurance contract (according to 214-FZ) with the UK before state registration of the first equity participation agreement. In addition to having a license for this type of activity, it must meet the following requirements:

• Work in the insurance field for at least five years.
• Have own funds in the amount of more than 400 million rubles, with a chartercapital of at least 120 million rubles.
• Do not have grounds for the bankruptcy proceedings of the UK.
• Comply with the conditions of financial stability specified in the insurance legislation for six months.
• Do not give the Central Bank a reason to appoint an interim administration.
• Have no pretext for an arbitral tribunal to initiate any of the bankruptcy proceedings.

Builder liability insurance (insurance companies admitted to this activity, their list, the Central Bank publishes annually on its website), according to many commercial insurers, is associated with high risks, since this business does not have transparent income and expenses.

List of ICs eligible for developer civil liability insurance

In the Central Bank of the Russian Federation, a compensation fund is being formed at the expense of contributions from developers, from which funds will be allocated for the completion of facilities or compensation for losses to equity holders.

There are only 16 such companies this year:

• VSK Insurance Joint Stock Company;
• Regional Insurance Company LLC;
• Joint Stock Company "Insurance Group "UralSib";
• Ingosstrakh Insurance Public Joint Stock Company, and others.

The list of insurance companies to insure developers is not permanent. The Central Bank updates it every year.

Requirements for Mutual Insurance Company

Builder's insurance prescribed by Article 15.2214 of the Federal Law, enables a construction organization to participate in the Mutual Insurance Society. What is it about?

This is a non-profit organization whose main activity is the insurance of all property interests of each of the participants on the basis of mutual insurance.

The legal basis for the creation of such an organization is prescribed in the Civil Code, Article 968, and the activities of the company are regulated by Law No. 286-FZ "On Mutual Insurance", which entered into force on November 29, 2007

Builder's liability insurance occurs on a reciprocal basis, through the pooling of contributed funds. At the same time, the legislation does not provide for the distribution of the resulting amounts of net income between members of the community. For the purpose of the OBC is the creation of an insurance reserve by accumulating funds. It can be used in the event of bankruptcy or dishonest performance of the obligations of one of the developers (that is, to pay equity holders their contributions).

Mechanism not worked out

The past two and a half years since the release of the law have shown the inconsistency of the chosen methods, their inability to guarantee the fulfillment of the developer's obligations to equity holders. Insurance payments do not allow you to return the actually invested funds. Therefore, the amendments to the law, which entered into force in January of this year, obligated the developer to pay a specially calculated amount to the Stateequity construction compensation fund. Deductions are made from each newly concluded equity participation agreement. The Fund's funds can be used to complete construction work for problematic facilities or to pay compensation to equity holders, if the developer is declared bankrupt.

Another amendment to the law was an alternative to developer insurance. These are the so-called escrow accounts. Through them, the bank, as an intermediary, pays off with equity holders.