PHL banks need IC nod to sell insurance

Bacolod City – Banks intending to sell insurance products that include variable life insurance are now required to have a bancassurance agreement with an insurance company approved by the Insurance Commission of the Philippines (IC).

 

In a statement released on the sidelines of the Asia Pacific Economic Cooperation (APEC) 2015 summit in Bacolod City, the IC said the new policy is embodied in the implementing rules and regulations (IRR) signed by Insurance Commissioner Emmanuel Dooc on Monday.

 

The IRR is part of the implementation of the Amended Insurance Code of the Philippines President Benigno Aquino III signed into law in August 2013.

 

“The selling of insurance products, including variable life insurance products, within the premises of a bank is only allowed after the Insurance Commission (IC) has approved the bancassurance agreement entered into by and between the insurance company and the bank,” the IC said.

 

The IC, however, clarified that cross-selling of microinsurance products by rural, cooperative and thrift banks shall remain governed by BSP Circular No. 683 dated February 23, 2010.

 

The bancassurance agreement must contain a provision stating the insurance company will comply with all the requirements provided in the Insurance Code of the Philippines as amended by RA 10607, according to the IRR.

 

On reportorial requirements, insurance companies must submit to the commission an annual report showing a list of banks covered by a bancassurance agreement.

 

“In order to protect the insuring public, the Rules provides that both the banking institution and insurance company should formulate an effective consumer protection framework specifically designed to address all complaints that may arise from the conduct of Bancassurance which shall include processes and procedures, among others,” the IC statement read.

 

The IRR also capped the role of bank employees in bancassurance.

 

“As a general rule, the role of the bank employees in bancassurance shall be limited to the referral of clients to the representatives of the insurance company,” the IC said.

 

The commission clarified that bank employees who have undergone the required training and possess the required qualifications “may make preliminary presentation of its insurance products as part of his/her task of presenting product option to bank clients.”

 

The commission noted: “The IC will not require bank employees to obtain a license as an insurance agent as such task is merely incidental to their duties as bank employees.”

 

In order to differentiate insurance products from bank products, the IRR requires bank premises where bancassurance activities are conducted must be distinct and clearly marked off against areas where bank products are sold.

 

Embodied in the implementing rules are additional market conduct guidelines involving variable life insurance products.

 

“In addition to the existing IC regulations on market conduct guidelines, the Rules on Bancassurance provides for provisions on enhanced consumer protection requirements by providing the minimum practices to be observed in the selling of variable life insurance products,” the IC said.

 

The IRR is a result of a series of consultations with the Bangko Sentral ng Pilipinas and the insurance industry, the commission said. – Elizabeth Marcelo/VS, GMA News