Life insurers are opposing proposed legislation that will split the regulation of the protection and investment components of variable unit linked (VUL) products.
Such policies offer life insurance with a built-in savings component and investment. The pending legislative proposal in Congress is aimed at putting under the Insurance Commission (IC) the regulation of VUL products’ protection component, while allowing the Securities and Exchange Commission (SEC) to oversee the investment component, reported Inquirer.net.
Philippine Life Insurance Association (PLIA) president Benedict C Sison said that the proposed Bill on collective income schemes (CIS) “may not be in the best interests of our clients and the industry”.
He said that the Bill will “impose a reductant and costly governance structure, similar to other products to be classified as CIS”.
The House of Representatives have been pushing for the CIS bill even as PLIA, the Insurance Commission and the Department of Finance (DOF) had explained that VULs’ protection and investment components were indivisible as an insurance product.