Effects of the war in Ukraine on banking and insurance services

On this page, we assemble frequently asked questions about the effects of the war in Ukraine on banking and insurance services.

Banking


 


Posti is suspending all letter and parcel deliveries to Russia and Belarus as of 11 April.

Posti is indefinitely suspending all letter and parcel traffic between Finland and Russia and Finland and Belarus as of 11 April 2022. This decision is based on the exceptional circumstances as per the Universal Postal Union agreements. 

For OP Financial Group, the suspension of postal deliveries is a force majeure event beyond our control. We are not able to send by post even any statutory information or information related to agreements – like bank statements, paper bills or notifications of changes to agreements – to our customers residing in Russia or Belarus. We will resume normal communication as soon as letter and parcel traffic to Russia and Belarus is restored. 

We recommend making e-invoicing agreements for the bills sent by OP Financial Group. Please contact our Customer Service if necessary.

At OP Financial Group, we will continue serving our customers in our channels while paying attention to the prevailing situation.

At the moment, only some payments in euros and roubles go through to Russia. The payments may be subject to long delays. However, the situation can change quickly in the near future.

In its operations, OP always takes account of international sanctions according to the situation prevailing at any given time.

Currently, aid and assistance are being given to Ukraine in plenty. However, Ukraine is in a state of war. This means that payments may suffer technical problems, in other words, they may be returned to the sender’s account.

Visa and Mastercard have suspended their operations in Russia. Consequently, OP's Visa and Mastercard cards have not worked in Russia since 9 March 2022. 

These suspensions apply to all use of the cards in Russia, including credit and debit features at card readers, in online stores and at ATMs. The K-Plussa Maksuaika cards will also stop working. 
 
We recommend that all our customers who either are in Russia or plan to travel there follow the Ministry for Foreign Affairs’ travel advice.

We apologise for any inconvenience caused by the suspension of card use in Russia.  

 

A safe way of donating money to Ukraine is through well-known international organisations. For the time being, we will not charge the following relief organisations for incoming credit transfers:

OP transmits all payments that are possible to transmit from the perspective of the sanctions considered by OP. Under the current circumstances, however, some slowness may unfortunately occur in payment transactions.

Your money is in the best safe in your account with the bank. Funds in the account are covered by deposit guarantee. Keeping a large amount of cash is never recommended. Such large amounts are susceptible to fraud, that is to say, that the real risk is that they become a victim of robbery.

OP’s customers can withdraw cash worth over 4,000 euros from ATMs, store checkouts and OP cooperative bank branches.

Deposit guarantee protects a depositor's funds on an account if the deposit bank becomes insolvent. If a deposit bank is declared bankrupt or is in permanent default, the Financial Stability Authority pays compensation to the bank’s depositors from the Deposit Guarantee Fund.

The deposit guarantee scheme covers all private individuals, regardless of the depositor's domicile or nationality. Depositors can also include death estates, companies regardless of their legal form or size, registered associations and foundations.

While deposits by companies and associations are mainly covered by the scheme, a private trader or self-employed person does not have an independent deposit guarantee for their business-related deposits. This means that when calculating the deposit guarantee compensation, the self-employed person's private and business deposits are treated as one depositor's deposits. More information on deposit guarantee is available at rvv.fi/en/deposit-guarantee.

Deposits with OP Financial Group are covered by the Finnish deposit guarantee scheme up to 100,000 euros. OP Financial Group member cooperative banks are considered a single bank in respect of the deposit guarantee.

Read more about deposit guarantee on the Financial Stability Authority website

 

Investing


 

OP’s day-to-day market monitoring can be found on OP Media

Read more about this topic (in Finnish)

Investment is a long-term activity where you will likely encounter some volatility and share price changes. Accordingly, we recommend sticking to your investment plan also in exceptional circumstances.

The Central Bank of the Russian Federation has ordered to interrupt the execution of all foreign equity orders on the Moscow Exchange. As a result of the restrictions imposed by the Bank of Russia, subscriptions and redemptions for the OP-Russia fund have been suspended, by virtue of section 9 of the fund’s rules, until the trading restrictions applied to the fund have been lifted and trading resumes.

In practice, it is not possible to place subscription or redemption orders for OP-Russia at the moment. The same applies to OP Life Assurance Company’s insurance savings products where the buying and selling of OP-Russia fund units have been suspended.

Due to the prolonged suspension, we have decided to take the following measures regarding open orders. These measures affect transactions created between 16.00 on 25 February and 14.00 on 28 February.

1. We have released preauthorisations for subscription transactions not confirmed before the fund's closure and have annulled the related open orders, including subscriptions that involve switching to a new fund.

2. We have returned amounts debited under a systematic investment plan if the related subscriptions were not confirmed before the fund's closure, and have annulled the fund’s open orders.

3. We have annulled any fund redemptions (including redemptions that involve switching to a new fund) not confirmed before the fund's closure.

Read more

OP-Russia’s portfolio includes not only equities quoted on the Moscow Exchange but also equities quoted on the London Stock Exchange and US stock exchanges as well as ADRs/GDRs. It also includes Georgian and Kazakh companies whose equities are traded in a normal way.

Subscriptions and redemptions for the mutual fund are suspended indefinitely. According to the fund’s rules, the fund cannot be opened for subscriptions and redemptions because the valuation of the fund’s investments cannot be performed reliably.

We are closely following the progress of the situation and have assessed various options for the fund if the situation is prolonged. Unitholders’ interests, the fund’s rules and legislation play a significant role in analysing the options.

We are not making any new investments in Russian equity or bonds via OP mutual funds. We aim to sell our old holdings of this kind over the next few months — while taking account of sanctions and market conditions.

We will provide more details on measures related to the OP-Russia mutual fund later.

Read more about the OP-Russia mutual fund

A Profit Share is an investment in your OP cooperative bank’s equity capital. It is a good, long-term investment for owner-customers of OP cooperative banks. OP Financial Group and its OP cooperative banks have a strong capital base, which provides security as times change.

The aim is to pay interest on Profit Shares in line with the return target, but you should bear in mind that this cannot be guaranteed. The payment of interest and its amount depend on the financial performance of the bank and OP Financial Group: the OP cooperative bank’s Representative Assembly or Annual Cooperative Meeting will decide on the interest payable by looking back at this performance. Profit Shares are not capital-protected products and their repayment is subject to certain conditions. You can even lose some, or all, of the capital you have invested.

Read more about the terms and conditions of Profit Shares

 

Buying a home and a home loan


 
After the seller has accepted the offer, the buyer can no longer cancel the offer. If the transaction is cancelled on the initiative of the buyer, the seller has the right to keep the down payment possibly made during the offer or receive the agreed fixed compensation. The down payment to be lost or the amount of the payable fixed compensation may be a maximum of 4% of the transaction price.

Only the preliminary agreement confirmed by the notary public or made in the Property Transaction Service of the National Land Survey of Finland creates a binding agreement between the parties. An offer given without a specified form and acceptance to it do not bind on the parties so that they could be obliged to do the transaction, lose down payment or pay contractual penalty. In many cases, a clause related to the contractual penalty is included in the preliminary agreement, which determines the amount that the party withdrawing from the transaction has to pay to the other party.

You can cancel your home loan application with no charges.
You can request a bid for the interest rate cap at op.f. After that, we will send you an offer that you can read through. Alternatively, you can also book an appointment at op.fi or by calling at 0100 0500.

Read more about the interest rate cap

As a result of the general uncertainty caused by the war, the housing market may slow down if some homebuyers and sellers take longer than usual when considering to buy or sell their home. General uncertainty may also put a check on price competition and curb the rise in home prices.

The war is unlikely to have long-term effects on the housing market, provided that the conflict does not become prolonged or extend beyond Ukraine’s borders. The situation caused by the war can be compared to the early days of the COVID-19 pandemic, when home sales slowed down but recovered quickly once uncertainties eased.

The situation caused by the war is comparable to the early days of the COVID-19 pandemic, when home sales slowed down but recovered quickly. Still, the conflict can cause hikes in energy prices, with resulting effects on inflation. The increasing costs of living and fuel will be visible in consumers’ daily lives. In particular, consumers who use heating oil and drive long distances will see the price hikes reflected in their daily lives.

Nevertheless, Finland’s dependence on energy imported directly from Russia is limited. Significant direct effects on the Finnish economy may still come from financial sanctions. This debate has revolved around isolating Russia and Russian banks from Western money markets as well as restrictions on payment transfers, which would cause exports of Finnish companies to Russia to slow down or cease. As a result, companies that have significant trade with Russia or Ukraine may need to adapt their operations or seek out new export partners elsewhere.

The uncertainty caused by the war and interest rate hikes will require consumers to pay increasing attention to their personal finances. Preparing for the unexpected is prudent at this time. During the pandemic, both households and businesses have built up savings that provide financial leeway. Even in uncertain times, saving, investing and ensuring the continuity of loan repayments always pays off.

OP Financial Group has previously estimated that the reference interest rate of many home loans, 12-month Euribor, will turn positive in 2022 and rise to one per cent in one or two years. We will continue to see a push to raise interest rates as inflation forces the ECB to tighten its monetary policy, but the schedule for this is decided by the situation in Ukraine.

Many of the risks borrowers face lie in changes in our personal circumstances or the broader world around us and are often hard to predict. In uncertain times, it is prudent to plan your personal finances as carefully as possible. Saving money while paying off a loan helps prepare for the future and gives leeway in case of unexpected expenses.

An interest rate cap protects your home loan against rising interest rates and keeps your loan costs and interest rate manageable also in the future.

Loan protection insurance offers a way to ensure your ability to repay a loan in case of unexpected events in life, such as unemployment.

Even in uncertain times, there are two key questions to consider when buying a home: ensuring your financial situation with the bank’s loan officer and determining your current home’s potential sale price with the help of a professional real estate agent. This gives you better insight into how interest rates and home prices are trending and helps you ensure that you don’t make rash decisions when buying a new home.

A home is the cornerstone of your wealth and a major financial decision that should always be thought over carefully.

 

Travel insurance

 

A state of war has been declared in Ukraine, and the Finnish Ministry for Foreign Affairs recommends avoiding travel to Ukraine (25 January 2022), Russia (27 February 2022), Moldova (27 February 2022) and Belarus (28 February 2022). Additionally, the Finnish Ministry for Foreign Affairs recommends immediately leaving Ukraine (11 February 2022) and Russia, the Russia-Ukraine border regions of Belgorod, Voronezh and Rostov (the regions across the border from Luhansk and Donetsk in Ukraine) (27 February 2022).

On this page, you will find information about insurance coverage related to the war in Ukraine. You can find instructions for other types of loss events and accidents at Pohjola Claim Help.

Pohjola Insurance complies with international sanctions, which may cause restrictions on paying compensation or granting insurance.

For more information about the war in Ukraine, please check the web pages of the Ministry for Foreign Affairs  

If you travelled to Ukraine, Russia, Moldova or Belarus before the Finnish Ministry for Foreign Affairs gave its recommendation to avoid travel to the country or to leave the country, the travel insurance is also valid for loss events and accidents caused by war for ten days from the day the recommendation was given.

If you travel to these countries after the Ministry for Foreign Affairs gave its recommendation to avoid travel to the country or to leave the country, the travel insurance does not cover loss events or accidents caused by war. If you were in the country at the time of the Finnish Ministry for Foreign Affairs’ recommendation, and you decide to stay in the country after the aforementioned ten-day period, the travel insurance does not cover loss events or accidents caused by war.

If your insurance also includes cover for high-risk areas for an additional fee, the insurance also covers loss events and accidents caused by war in Ukraine, Russia, Moldova and Belarus. However, if the insured person themself participates in war or an armed conflict, loss events or accidents caused by such events is not covered. Loss or damage due to nuclear accidents is also not covered.

The travel insurance has normal coverage for travel accidents and travel illnesses occurring in high-risk areas caused by reasons other than war.

Travel Emergency Service

If you are travelling in Russia, be prepared to pay for the treatment expenses yourself first and apply for compensation afterwards on OP-mobile or on the op.fi service. The Travel Emergency Service can help you with, for example, finding a reliable doctor or hospital.

At the moment, the Travel Emergency Service is very limited in Ukraine. Assistance may be available through neighbouring countries.

Travel Emergency Service 24/7 in case of an illness or accident abroad +358 10 253 0011.

Currently, the Traveller’s Crisis Cover of the Pohjola Traveller’s Insurance can cover a cancelled trip to Ukraine, Russia or Belarus, because these countries are in a state of war.
 
You can receive compensation for a cancelled trip if
  • you booked a trip to Ukraine, Russia or Belarus before the war in these regions started on 24 February 2022.
  • the Traveller’s Crisis Cover was valid before the war started in these regions.
  • When you cancel the trip, there must be less than 60 days till the start of the trip, and the event must be deemed to have caused an adverse effect on conditions at the travel destination at the time when the trip is due to begin.
  • When cancelling the trip, the Finnish Ministry for Foreign Affairs has acknowledged the state of war and recommends avoiding travel to the destination because of the war. For the time being, the Finnish Ministry for Foreign Affairs recommends avoiding travel to Ukraine (25 January 2022), Russia (27 February 2022) and Belarus (28 February 2022).
The OP-Visa Platinum payment card includes a separate Cancellation Cover for trips. The costs of a cancelled trip abroad are covered by the separate Travel Cancellation Cover, regardless of the reason, when the trip has been paid using the credit feature of the card.
 
The cancellation expenses are only covered for any portion for which you are not entitled to compensation or refunds from the tour operator or airline.
 
Traveller’s Insurance products no longer being sold (Pohjola Fixed-term Traveller’s Insurance or Corporate Travel Cover) do not cover the cancellation of trips due to war.
The Traveller's Crisis Cover included in Pohjola Traveller’s Insurance covers evacuation expenses caused by evacuation from the destination to Finland. The Evacuation Cover included Corporate Travel Cover covers evacuation from the destination to the traveller’s home country or country of secondment.
 
Currently, evacuation expenses are covered from Ukraine and the Russia-Ukraine border regions of Belgorod, Voronezh and Rostov (the regions across the border from Luhansk and Donetsk in Ukraine). Evacuation expenses include reasonable and necessary additional travel and accommodation costs which are caused by returning to Finland.
 
You can claim compensation for evacuation expenses if
  • your trip started before war broke out at the destination on 24 February 2022.
  • your trip started before the Finnish Ministry for Foreign Affairs gave its recommendation to avoid travel to the destination.
  • the Finnish Ministry for Foreign Affairs recommends leaving the destination country.
Traveller’s Insurance products no longer being sold and Pohjola Fixed-term Traveller’s Insurance do not cover evacuation from the travel destination due to war.

Your Pohjola Traveller’s Insurance or Corporate Travel Cover may also include cover for delayed or missed departures. If you miss your departure or have to wait for the start of your journey due to measures taken by authorities concerning public traffic, such as if authorities close down the airport, you may be entitled to compensation.

If you miss a departure or the departure is delayed in Ukraine, Russia, Moldova or Belarus due to the war, traveller’s insurance does not cover the loss if it does not include the additional cover for high-risk areas.

If the flight is cancelled due to war breaking out somewhere other than your travel destination, the cancelled trip is not covered.

If your tour operator cancels a trip, you should contact your tour operator or service provider about refunding the costs of the cancelled trip. Insurance does not cover a trip cancelled by the tour operator.

 

Motor vehicle insurance


 

Motor liability insurance

Issued green cards are only valid for the period indicated on them. Issued motor liability insurance and comprehensive motor vehicle insurance policies are valid in accordance with their terms. It is possible that compensation paid to Russia or Belarus will be complicated or even prevented due to sanctions.

Comprehensive motor vehicle insurance

Comprehensive motor vehicle insurance issued by Pohjola Insurance are valid normally in European countries (excl. Russia and Ukraine) and Green Card countries outside Europe. Comprehensive motor vehicle insurance include a “war clause”, which states that loss events or accidents caused by military operations are not covered (for example, a car being damage in a missile strike), but losses normally covered by comprehensive motor vehicle insurance that occur in a war zone are covered.

Vehicle emergency service

The vehicle emergency service in Russia operates to a limited extent through Falck’s local partners. In the event of an accident, you can get additional information and more detailed instructions by calling the vehicle emergency service. If you are travelling in Russia, be prepared to pay for the towing expenses to the local towing service provider yourself first and apply for compensation afterwards on OP-mobile or on the op.fi service.

Unfortunately, we are currently unable to provide help through the vehicle emergency service in Ukraine.

The vehicle emergency service 24/7 provides assistance in motor vehicle claims in Finland and abroad +358 10 253 0012.

 

Property insurances


 
According to the general terms and conditions of the insurance contract, insurance does not cover losses or accidents caused to the company by war. These include if the company’s property is damaged due to military operations or left behind in a war zone.

The Common Provisions of the terms and conditions of home insurance policies and other property insurance policies for personal customers state that insurance does not compensate for damage caused by war or armed conflict.

 

Sanctions


 

Sanctions constitute exerting measures related to the foreign and security policy. These mean restrictive measures applying to certain countries, persons, entities and groups. Sanctions are imposed, for example, by the UN Security Council, the EU and the USA.

Read more about International sanctions

The sanctions lists are publicly available to everyone on the websites of various authorities.

More information on the sanctions binding on Finland can be found on the website of the Ministry for Foreign Affairs (in Finnish)

For example, the details of persons on the Specially Designated Nationals list (‘SDN list’) are publicly available on the website of the Office of Foreign Assets Control (OFAC) of the U.S Treasury Department

Banks have several obligations based on legislation, requirements set by relevant authorities and the banks’ own risk management principles. In particular, banks must guarantee secure services. Operating in international financial markets also requires in practice in Finland to consider sanctions imposed by some other countries too.

The bank always makes an overall assessment of the customer relationship based on the information the bank has on it. To establish a customer relationship, the bank must know its customer as required by legislation. If the KYC requirements cannot be implemented, legislation forbids the establishment of a customer relationship.
Those legally residing in the EEA are entitled to basic banking services. However, the provision of services may be prevented if the bank cannot fulfil the obligations set for it.
A sanctions list check must always be performed for a new policyholder or insured person. Before approving a person as a policyholder and offering services, an insurance company must confirm that the person is not on sanctions lists that OP Financial Group complies with.
From the perspective of the payment of compensation, an insurance company has no obligation to pay compensation if the compensation is in conflict with sanctions that OP Financial Group complies with.