The Insurance Commission (IC) has issued the guidelines that will govern bancassurance activities, or the offering of insurance products by banks as allowed by the Insurance Code.
Insurance Commissioner Emmanuel F. Dooc issued Circular Letter 2015-20, prescribing the implementing rules and regulations on bancassurance. “In the exercise of its regulatory and supervisory powers over insurance companies, the insurance regulator requires that the bancassurance agreement must contain a provision that the insurance company will comply with all its requirements as provided under Republic Act 10607 and its implementing rules,” a statement from the IC said.
“As to the reportorial requirements, insurance companies are required to submit an annual report showing a list of banks with duly executed bancassurance agreement entered into by the concerned insurance company.”
Under the new circular, the bank and the insurance company entering into a bancassurance agreement should have a consumer-protection mechanism designed to address all complaints that may arise from the conduct of bancassurance. The circular said any bancassurance agreement entered into by a bank and an insurance company should first be approved by the IC.
Bancassurance or the cross-selling of insurance products within the premises of a bank was institutionalized under the amended Insurance Code to promote activities that provide insurance companies with additional clients, such as the bank’s depositors. As a general rule, the role of bank employees in bancassurance shall be limited to the referral of clients to the insurance agents. However, bank employees who have undergone the required training and who possess the required qualifications may make preliminary presentation of its insurance products, in which case the IC will not require such bank employees to obtain a license as insurance agents.
The new circular also prescribes that the bank premises where bancassurance activities are conducted must be physically distinct and clearly marked to differentiate these activities from areas where bank products are sold.