THE BANGKO Sentral ng Pilipinas (BSP) is set to issue new guidelines this year that will allow banks to offer their customers insurance products from multiple providers.
“A draft circular amending the cross-selling guidelines is currently being finalized to consider the inputs we received from various stakeholders. It is targeted for issuance this 2025,” BSP Deputy Governor Bernadette Romulo-Puyat said in a speech at an event on Tuesday.
Under current BSP and Insurance Commission (IC) regulations on bancassurance, or the presentation and sale of insurance products by an insurer to bank clients, the bank and the insurer must also belong to the same financial conglomerate before bancassurance activities may be allowed.
The draft rules released by the central bank in 2024 proposed to expand the scope of an allied undertaking for the purpose of cross-selling, defining this as entities that fall within the bank’s financial conglomerate or entities having a contractual relationship with the bank resulting in joint ownership or shared responsibility for a business undertaking.
These contractual relationships include partnerships, joint ventures, or strategic alliances, the BSP said.
The rules allow cross-selling of financial products like simple insurance and collective investment schemes like variable unit-linked life insurance policies on a stand-alone basis or bundled with products of the bank.
“It opens the field… With this, we want to open up banks to outside of their own conglomerate. So, this opens banks to other players,” Ms. Romulo-Puyat told reporters on the sidelines of the event.
She added that this will allow more insurers to offer their products to bank customers “as long as there’s a contractual relationship with the bank and the insurance company.”
This will help boost financial health among consumers, she said.
“If you open it up to more players, more people can be insured,” Ms. Romulo-Puyat added. “Now, it’s financial health… We want Filipinos not only to have an account, but to have savings, to have insurance.”
Philippine Life Insurance Association, Inc. President Rahul Hora, who is the president and chief executive officer of The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife Philippines), told reporters at the same event that the new cross-selling guidelines would be beneficial for the industry as insurers would be able to expand their reach.
“That’s what we’ve been requesting because then it allows rural banks to start getting into partnerships, which then allows insurance companies to expand into other areas and geographically spread their business,” Mr. Hora said.
Insurance penetration — or premium volume as a share of gross domestic product, which shows the contribution of the industry to the economy — inched up to 1.89% as of March from 1.78% a year prior, latest IC data showed.
Insurance density — or the amount of premium per capita, which reflects the average spending of each individual on insurance — increased by 13.4% to P1,094.94 from P965.56. — A.M.C. Sy