MANILA, Philippines–The Insurance Commission has tightened the rules covering bancassurance activities in a bid to better protect consumers.
Under Circular Letter No. 2015-20, issued by Insurance Commissioner Emmanuel F. Dooc last April 27, the sale of insurance products within bank premises is allowed only upon the Insurance Commission’s approval of the bancassurance agreements between banks and insurance companies.
Bancassurance, which involves cross-selling of insurance products within Bangko Sentral ng Pilipinas (BSP)-licensed banks, was institutionalized by the Amended Insurance Code under Republic Act No. 10607.
As for cross-selling microinsurance products by cooperative, rural and thrift banks, such activities will continue to be covered by BSP Circular No. 683 issued in 2010.
The Insurance Commission said it would require all bancassurance agreements to contain a provision wherein insurance firms would agree to submit reportorial requirements, including annual reports that would show a list of the banks with which they had duly executed bancassurance agreements.
“In order to protect the insuring public, the [implementing rules and regulations] provide 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 will include processes and procedures,” the Insurance Commission said.
“The rules on bancassurance provide for provisions on enhanced consumer protection requirements by providing the minimum practices to be observed in the selling of variable life insurance products,” it added.