Newsletter
NEW RULES FOR BANCAS-SURANCE BUSINESS
On 29 July 2005 the Financial Supervisory Commission announced the Guidelines Gov-erning Banks, Insurance Companies, Insurance Agents, and Insurance Brokers Engaged in Bancassurance Business, which will take effect on 1 November 2005. The Guidelines comprise 13 articles. The main points are as follows:
Before conducting bancassurance business, a bank must obtain an approval from the regu-latory authority for doing cooperative promo-tion or joint marketing of insurance products.
Before conducting bancassurance business, a bank must obtain an approval of its board of directors, and must establish or designate de-partments to oversee the planning and execu-tion of such business and to manage bank staff involved in soliciting insurance business.
Bank staff who solicit insurance business, and management staff responsible for overseeing such business, must be qualified and duly registered as insurance agents in accordance with the relevant regulations.
A bank engaged in bancassurance business must establish and implement internal controls and risk management.
A bank must establish or designate depart-ments responsible for handling complaints from insurance customers arising out of ac-tions of bank staff when soliciting insurance business.
A bank must ensure that the promotional lit-erature and advertising used by its staff when soliciting insurance business has been ap-proved by its correspondent insurance com-pany.
If a bank staff make misleading or untrue statements when soliciting insurance business, or fail to inform customers of risk, the bank will be liable jointly and severally with the insurance agent, insurance broker, or insur-ance company with which it has a contractual relationship, for such damages as may be due according to law or contract.