2 rural banks get BSP green light on microinsurance, 50 others in line

Bangko Mabuhay in Tanza, Cavite and Mallig Plains Rural Bank in Isabela province are the first two rural banks the Bangko Sentral ng Pilipinas (BSP) has allowed to engage in microinsurance services. Some 50 other rural banks are interested in venturing into financial relief and risk protection for the low-income sector.   “The recent approval authorizes the banks to present, market and sell microinsurance products in their branches and offices as provided under Circular 683 (2010),” the BSP said in a statement Thursday.   Bangko Mabuhay and Mallig Plains Rural Bank committed to limit the amount of premiums, contributions, fees and charges on their microinsurance products. The amounts cannot exceed five percent of the current daily minimum wage, or around P20. The ceiling on guaranteed benefits must not to exceed 500 times the current daily minimum wage, or around PhP 210,000.   “The approval validates the potential of rural banks, with a network of over 2,700 offices nationwide, subject to certain prudential rules and regulations, to serve as distribution points for authorized microinsurance products offered by licensed providers,” the BSP pointed out.   The BSP has given initial clearance for the 50 other rural banks waiting in the wings “to apply for the necessary provisional license from the Insurance Commission.”   “Once this provisional license is obtained, the BSP will grant the appropriate authorization for these banks to sell microinsurance products during the license validity of one year,” the BSP said.   The rural banks seeking microinsurance licenses must amend their articles of incorporation to include microinsurance as a secondary activity. “The approved amended AOI must be submitted to the IC on or before 30 June 2012, otherwise the IC shall no longer renew the license,” the BSP added. — ELR, GMA News