Mutual funds no longer allowed to sell insurance policies
The Ministry of Economy and Trade issued a decision that forbids mutual funds to sell insurance policies either directly or indirectly to the public. The decision will be carried out by the Insurance Control Commission (ICC).
Insurance companies are being competed against by mutual funds that are illegally offering different kinds of coverage. Mutual funds are legally only allowed to sell medical policies as a social service. But many have gone beyond this jurisdiction.
Unlike insurance companies, mutual funds are not required to have financial reserves or pay an 11 percent tax per policy.
Elias Hanna, Chairman of the Lebanese Insurance Brokers Syndicate, said: “This decision has brought justice to all insurance stakeholders who unfairly undergo competition from funds and have to pay yearly financial dues.”
The Association of Insurance Companies (ACAL) had recently filed a lawsuit against certain funds that even sell travel and third party liability motor insurance.
“The insurance sector is starting to be reformed thanks to the multiple steps taken by the ICC to safeguard the sector,” Hanna said.
Since the beginning of the year, the ICC started a full breakdown on shops that sell insurance policies without license.
Reported by Yassmine Alieh
Date Posted: Mar 10, 2017