Central Bank asked to deal
with banks selling insurance
PHILIPSBURG--Commercial banks should remove their insurance departments at least 500 metres from the regular banking operations. The St. Maarten Insurance Brokers Association (SIBA) has launched a serious appeal with the Central Bank of the Netherlands Antilles to do whatever is legally possible to look after the interests of the clients.
The SIBA board comprising President Richard Boyd, Vice-President Robin Ramrattan and Secretary Neil Henderson met with two representatives of the Central Bank on Thursday to discuss the issue. That the Central Bank takes SIBA’s complaint seriously can be concluded from the fact that its representatives were in St. Maarten to meet with the SIBA board within a week after SIBA had sent a letter to the Central Bank addressing the issue.
Henderson told The Daily Herald the SIBA board had wanted to sensitise the Central Bank and legislators to have commercial banks remove their insurance departments from the regular bank operations. “Clients should have the freedom of choice. Currently insurance policies are being imposed on them and it’s not always the best policy and the best price that they are getting,” Henderson said.
The proposed 500-metre distance between the insurance department and regular banking operations is to guarantee that the client has enough time to make up his or her mind before purchasing insurance with the same financial institution.
The SIBA board said it had been bombarded with complaints of clients who, as a prerequisite to their obtaining a loan, were being sent directly to the banks’ insurance departments. SIBA has protested on various occasions against what it calls unfair practices of some commercial banks in St. Maarten.
This time the board of the brokers association is very positive that strict measures will be taken. Henderson: “The meeting with the Central Bank went very well. It told us that it too has been monitoring the whole financial sector from up close. There is a rapid growth and the Central Bank needs to keep a close eye on these new conglomerates in terms of its responsibility as financial supervisor.”
The Central Bank will be sending out letters to the commercial banks instructing them about distancing themselves from these actions. “The Central Bank too indicated it has been receiving complaints from clients and insurance brokers,” Henderson said.
Asked whether there is any legislation preventing banks from selling insurance, the SIBA board pointed out that there was no law prohibiting banks from being in insurance mediation. However, the SIBA board said, there is legislation stating that if there is something wrong – for example, if insurance is being forced on clients – it justifies SIBA’s request for legislators to legislate against this.
