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Lebanon: Regulator to tighten bancassurance regulations

Source: Middle East Insurance Review | Feb 2018

The Insurance Control Commission (ICC), attached to the Ministry of Economy and Trade, has announced its intention to amend regulations that govern the sale of insurance products by banks to tighten supervision over bancassurance. The process will be taken in coordination with the Bank of Lebanon.
 
   Banks have the right to sell insurance products provided that the sale is made through an approved insurer that has a representative office in the establishment in question or through a brokerage operation or intermediation.
 
   However, for years, several banks and financial companies have taken the liberty to offer their own insurance products, often as offerings complementary to credit facilities, reported L’Orient Le Jour, citing a bank executive. “Banks do not have the right to promote insurance products using their brand,” the source said.
 
   There is no provision in the Law on Money and Credit that suggests banks are allowed to distribute or sell insurance products. Banks are forbidden from operating outside the scope of their business. In the same vein, the Bank of Lebanon does not allow banks to distribute insurance products.
 
   On the insurance side, marketing is allowed for authorised intermediaries. The insurance law states that “it is forbidden for anyone to claim the status of an intermediary until after having obtained a special authorisation from the Ministry of Economy and Trade”.
 
   The lines are blurred particularly within banking groups that own an insurance company, said an insurance executive, adding that money changing and remittances companies sometimes offer insurance products outside the legal framework.
 
   The ICC has been forced to alert the central bank following a number of promotion campaigns carried out by some banks in the media or on social networks to market insurance. This has led to complaints by insurers. M 
 
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