QuestionsQuestions (IC Circular Letter No. 2015-20)
Bancassurance is the presentation and sale of an insurance company’s insurance products to bank customers within the licensed bank premises (head office or BSP-licensed branches) under rules that may be promulgated by the Insurance Commissioner and BSP. For clarity, “bancassurance” and “cross-selling” can be used interchangeably.
Bancassurance/cross-selling by insurance companies may be conducted only in bank premises where the bank has secured prior Monetary Board (MB) approval to engage in the activities. Additionally, the insurance company’s bancassurance arrangements/agreements must be approved or ratified by its Board of Directors, and insurance products offered in that bank must have prior approval of the Insurance Commissioner.
No. Insurance companies cannot offer insurance products for cross-selling at any bank unless the products have the prior approval of the Insurance Commissioner.
Unless specifically trained and qualified, bank employees’ role is limited to referring bank clients to the insurance company’s sales representatives. Clients must give prior consent before such referral.
As an exception, bank employees specifically trained and certified by the insurance company to discuss product features and the client’s financial needs may make preliminary presentations to bank clients, as part of presenting options. Insurance Commission prescribes and approves such training programs.
As long as the participation is merely incidental to their bank duties, they are no longer required to obtain an insurance agent’s license. However, the Commissioner may require them to obtain a license if deemed proper and will issue appropriate guidelines.
Examples include: (1) assessing the client’s financial needs against existing financial products; (2) preliminarily presenting options without making final recommendations; (3) preliminarily presenting generic product descriptions and/or background/profile of the insurance company; (4) preliminarily presenting historical returns with proper disclaimers; and (5) other activities required to obtain the client’s consent to be referred to licensed representatives.
Bank employees are not allowed to conduct substantial presentations involving discussion of product details and particularities. They may not conclude any contract; they must refer contract conclusions to the insurance agent. “Conclusion of a contract” includes agreements and the amount of investment or premium to be paid.
There must be a clear distinction between the representatives of the financial product provider who sell insurance and the bank employees. Authorized bank employees who market/sell must be clearly identified. Also, presentations/sales must be conducted in distinct areas from where own-bank products are sold.
Yes. The arrangements/agreements must be submitted to the Insurance Commission for approval. Parties may only conduct bancassurance activities upon review and approval by the Insurance Commission.
Among others: (1) a commitment that the insurance company will comply with Insurance Commission requirements; (2) a mechanism to address complaints arising from bancassurance transactions; and (3) provisions that areas within bank premises where activities are conducted must be distinct and clearly marked.
Yes. The company may omit provisions that are commercially sensitive (e.g., formula/computation of pre-termination fee or buy-out option fee; schedule and computation of termination fee) before submission to maintain confidentiality, but only if it seeks/obtains prior approval from the Insurance Commission to omit such items. Deleted provisions must be divulged to the Insurance Commission if warranted and as directed.
No actual presentation of insurance products may be initiated and conducted by the authorized representative in bank premises unless prior consent is given by the client.
A standard disclosure statement must be included in promotional materials, the Product Highlight Sheet (PHS), and VUL policies, substantially declaring: (1) it is not a deposit product; (2) earnings are not assured; and (3) the principal amount invested is exposed to risk of loss. Another approved form requires explanation by a licensed representative and gives contact details for further information.
They include: (1) providing a Product Highlight Sheet (PHS); (2) conducting a Client Suitability Assessment through a CSA/CPQ/RPQ before acquisition; (3) generating an Investment Policy Statement (IPS); (4) disclosing any material conflicts of interest; and (5) including the standard disclosure statement in required documents/materials.
An annual Summary Report must be submitted not later than 30 April of the ensuing year, covering the year ending 31 December. It must list banks/branches with duly executed bancassurance arrangements/agreements and include addresses, involved personnel/representatives, and lists of complaints and claims with actions taken.