BANCASSURANCE

1. Define Bancassurance
Bancassurance, also known as cross-selling, is defined as the presentation and sale to bank
customers by an insurance company of its insurance products within the premises of the head
office of such banks duly licensed by the Bangko Sentral ng Pilipinas (BSP or Philippine Central
Bank) or any of its branches, under such rules and regulations which the Insurance Commission
and the BSP may promulgate. It involves the cross-selling of a financial product to a bank client
inside bank premises.

2. What are the requirements for bancassurance

(1) The presentation and sale of insurance company’s insurance products must be done
within the premises of the head office of the bank.
(2) The bank must be duly licensed by the Banko Sentral ng Pilipinas (BSP) under such rules
and regulations promulgated by the Commissioner and the BSP.
(3) The insurance company must possess all the requirements prescribed by the
Commissioner and the BSP before it can enter into a bancassurance arrangement;
(4) The insurance product, whether life or non-life, to be issued or delivered must be in the
form previously approved by the Commissioner; and
(5) Personnel tasked to present and sell insurance products within the bank premises must
be duly licensed by the Commissioner, and are subject to the rules and regulations
promulgated by the Commissioner.

3. Define:
(1) Cross-selling – mean the presentation and sale of a financial product to a bank client
inside bank premises through written or verbal communications.
(2) Financial conglomerate – refers to a group of entities whose exclusive or pre-dominant
activities consist of providing significant services in at least 2 different financial sectors
(banking, securities and insurance).
(3) Financial product – refers to products which do not create exposure to investment risks,
such as retail lending, or loan products, insurance products, retail financial products and
other similar financial products as may be authorized by the Monetary Board of the BSP.
(4) Financial product provider – means a regulated financial entity which originates or
produces the financial product and bears all the risks associated with its issuance. The
financial product provider should be incorporated and domiciled in the Philippines
including duly licensed foreign bank branches.
(5) Bank premises – refers to the premises of the head office and branches
(6) Investment risk – refer to the risk, which is borne by the client, of loss of the principal
amount (either full or partial) at maturity or risk of not achieving targeted rate of
returns.

4. Who shall approve and oversight policies

 The board of directors of the bank (or its equivalent in the case of foreign bank
branches) shall be responsible in the approval and oversight of policies relating to cross-selling
arrangements.