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THE
Bangko Sentral ng Pilipinas (BSP) acknowledged there is
not much it can do about foreign banks selling
dollar-denominated insurance policies to residents and
having the transaction consummated abroad.
So on
Thursday it revealed a plan to allow foreign banks to
cross-sell, also called bancassurance, as soon as an
ongoing study is completed.
“We’re
studying the bancassurance issue. We’re looking at
modules to expand the possibilities of bancassurance
without violating the law,” said Deputy Governor Nestor
Espenilla Jr.
Local
insurers have been very vocal about the clear disregard
of regulations when foreign banks openly sell
dollar-denominated insurance policies on their premises
to customers, who perhaps—not surprisingly—eagerly buy.
What
these buyers may not know is that the insurance they buy
from banks are usually tagged higher premiums. Or even
if they know, they may believe they are safer or better
in other ways, according to observers.
Peter
Coyuito, president and chief executive officer at First
Guarantee Life Assurance Co. Inc., had raised the issue
before Insurance chief Eduardo Malinis and before BSP
Governor Amando Tetangco Jr. without much success.
While
Tetangco made it clear bancassurance is a highly
regulated activity, the foreign banks allegedly continue
to sell them as if Tetangco has not issued a circular
prohibiting the activity, according to Coyuito.
Espenilla said the BSP is aware that some foreign bank
clients want the products sold to them and that some buy
them overseas. “So you cannot stop it,” he said.
Espenilla would not elaborate on the modules they have
in mind, although local regulations state only those
banks owning a minimum of 5-percent equity in an
insurance firm may engage in bancassurance.
Insurers
like Coyuito continue to complain but with the products
selling “like hotcakes” they may be banging their heads
on a wall. One reason for the lure of foreign insurance
may be due to local counterparts being heavily taxed. |
