MANILA, PHILIPPINES – The Insurance Commission (IC) of the Philippines now requires banks that intend to sell insurance products to first secure bancassurance agreement with insurance firms.
The insurance firms that the banks will deal with must also be approved by the IC and the bancassurance agreement must also pass the scrutiny of the insurance regulator.
The bancassurance agreement must also contain provision stating that the insurance company will comply with all the requirements provided in the Insurance Code of the Philippines, which was signed into law by Philippine President Benigno Aquino III 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 has approved the bancassurance agreement entered into by and between the insurance company and the bank,” the IC said.
The new policy is embodied in the implementing rules and regulations (IRR) signed by Insurance Commissioner Emmanuel Dooc on Monday.
The new policy, however, does not cover cross-selling of microinsurance products by rural, cooperative and thrift banks because these will remain under the governance of the Bangko Sentral ng Pilipinas.
“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.
In another insurance related news, Malaysia’s Maybank Ageas said it is in talks with a number of companies in the Philippines for its planned acquisition in the country.
Maybank Ageas, the parent company of Etiqa Insurance Bhd and Etiqa Takaful Bhd in Malaysia, said it seeks to acquire small and inexpensive insurance firms in the Philippines as part of its expansion into the country.
Maybank Ageas CEO Kamaludin Ahmad told reporters that the company that it wants to expand in both markets as early as 2016, eyeing insurance firms that have lower valuation but with strong business operations and distribution channels.
Ahmad, however, said that the selection process for its Philippine acquisitions will take a while, adding that obtaining insurance license in the country is quite difficult. – BusinessNewsAsia.com