BSP to revise cross-selling regulations
By Ted P. Torres (The Philippine Star) | Updated March 22, 2013 - 12:00am
MANILA, Philippines - The cross-selling regulations of the Bangko
Sentral ng Pilipinas (BSP) is presently undergoing revisions.
According to BSP Deputy Governor Nestor Espenilla Jr., specific
proposals are already in draft form and that these are being distributed
for comments with the different institutions involved.
"We already have specific proposals, and that it is just undergoing
final legal review for the BSP," Espenilla said.
Espenilla said they are consulting with banks and other interested
parties. "I assure that it will be responsive to what the bankers are
saying," he said.
The present practice of cross-selling under BSP regulations allows
universal banks or expanded commercial banks to offer their products and
services to affiliate entities, such as life insurance firms.
BSP Circular 357 issued in 2002 also states that for an insurer to be
classified as an affiliate, the bank must own at least five percent
equity of the said entity.
The possible amendments to the circular will open the practice of
cross-selling among commercial and thrift banks.
Espenilla said that in the case of life insurance, the new proposal may
allow the sale of life insurance but limited to traditional or pure
protection insurance products. "It should be finalized within the year,"
he added.
Thrift and rural banks are already allowed to sell micro-insurance
products through its branches, as long as there are no investment features.
These products have premiums ranging from P50 up to P500, while coverage
amounts up to a million pesos only.
In the banking system of other regions, bancassurance is widely
practiced without the exclusivity of a cross-selling regulation in place.
"When you enter a bank branch for example in Singapore or Hong Kong, you
can pick out brochures of insurance companies and make transactions over
the counter," one insurer said, adding that there may be three to five
insurers selling their wares at any given bank.
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