The end result no doubt is bancassurance or cross selling. Classified as cross-selling by the Bangko Sentral ng Pilipinas (BSP) under BSP Circular 357, it is more popularly known as bancassurance or allfinanz as the German bankers prefer to call it. Bancassurance is the combination of insurance and banking products and services through a common distribution channel and/or to the same client base.
Cross selling allows banks to sell products of their subsidiaries or affiliates.
PNB president Lorenzo V. Tan admitted in an interview that they have been approached and have been holding talks with three foreign insurers, which he refused to name at the moment.
"They are exploratory talks as we would like to keep our options open," Tan said.
However, there could be some complication. Beneficial PNB Life Insurance Co. is a subsidiary of PNB, and it was ranked among the top 20 life insurance companies in 2001.
While the arrangement does not bare the bank from practicing cross selling through its subsidiary, PNB can also market but not sell products of other insurers.
The Yuchengco-led Rizal Commercial Bank Co. (RCBC) markets insurance products of Nippon Life Insurance Company of the Philippines (Nippon Life) even if it sells products of its subsidiary Great Pacific Life Assurance Corp. (Grepalife).
Meanwhile, Sun Life of Canada has openly expressed its desire to forge an alliance with commercial banks, foreign or domestic. However, the specifics of the business alliance depend largely on what the law allows.
Foreign insurance companies must sell at least five percent of its equity to a commercial bank for it to be classified as an "affiliate" thereby legally allowed to practice bancassurance. – TPT