BSP studying relaxed bancassurance rules

The Bangko Sentral ng Pilipinas will be studying its bancassurance regulations so it may give banks more freedom to sell insurance products without violation existing prohibitions. Central bank deputy governor Nestor Espenilla Jr. told reporters on Thursday that the BSP is open to "expanding the possibilities" under current bancassurance laws. "We're studying the bancassurance issues. We're looking at models to expand the possibilities of bank assurance without violating the law," Espenilla said. Under existing bancassurance rules, only banks with insurance subsidiaries are allowed to sell life insurance products to their clients. Banks which have no stake in insurance firms have asked the central bank to scrap the regulation requiring lenders to own 5 percent of the insurance company whose products would be sold to clients. Both lending institutions and insurance companies alike say that the 5-percent requirement was limiting consumer access to insurance products and compounding the cost of taxation. Insurance companies said the restriction was also complicating distribution problems in the country where there is no universal health care and insurance is largely paid for privately. The BSP's restriction, however, was intended to ensure that banks had a stake in insurance companies whose products they were selling. This way, banks as stakeholder would be a natural check and balance on the use of trusts that ultimately fund maturing policies. - GMANews.TV