Discount Bank will cease to insure its provident fund members if the Superintendent of Insurance insists on his view that Phoenix and Clal Insurance may not pay commissions for receiving insurances, Discount Bank senior deputy general manager and former Supervisor of Banks Dr. Amnon Goldschmidt told "Globes" today (Wednesday).
Goldschmidt: "We insure all provident fund members with risk insurance, which ranges from NIS 15,000 to NIS 300,000. The insurance companies pay us a commission of 22% of the premium, to cover handling and collection costs. This figure has been checked, and it emerged that it barely covers actual costs."
No response has been received from Phoenix or Clal Insurance. Superintendent of Insurance Doron Shorer informed both these companies, and others, that from January 1 they will be forbidden to repay the banks part of the premiums received for insuring provident fund members, since in his view this is contrary to the regulations.
Bank Leumi told "Globes" that the bank arranges risk insurance for its provident fund members without collecting any commission from the insurance companies. First International Bank reported the same. Bank Hapoalim insures its provident fund members with Clal Insurance, and charges a commission to cover costs. The bank’s management has received no notice of any ban on taking such commissions.
An authoritative banking source said today (Tuesday) "This is storm in a tea cup. The entire banking system’s total revenue from these commissions is less than NIS 10 million a year, compared with the NIS 250 million the mortgage banks collect in insurance commissions."