"Globes" has learned that Mishkan Mortgages, Bank Leumi Mortgages and Discount Mortgages Bank continue to sell their customers life and property insurance, despite the deputy Superintendent of Insurance, Eyal Ben Shalush order to decease.
It should be noted that revenues from insurance sales by the four banks, who lead the mortgage market in Israel, amounted to NIS 142 million last year.
The Mishkan Mortgage Bank board of directors announced last week, in its quarterly report, "The insurance company (Arieh together with Clal Insurance) told the deputy Superintendent that the insurance agreement is in effect, and as guarantor it must fulfill its commitments and pay Mishkan in accordance with them."
Mishkan also stated that revenue from insurance commissions represent 27% of the bank’s total operating revenue.
The Discount Mortgage Bank board of directors announced it will continue to sell life insurance to borrowers. The bank’s legal counsel told the Superintendent of Insurance that in his opinion, the insurance and collection of commission were executed legitimately. Revenue from insurance commissions represent 22% of the bank’s total operating revenue.
Bank Leumi Mortgage Bank told "Globes" today that the bank will continue to sell insurance to borrowers, and collect commission from insurance companies on Migdal insurance policies. Revenue from insurance commissions represent 23% of the bank’s revenue.
Tefahot Mortgages Bank also continues to sell insurance to borrowers, and collect commission.
In response, Superintendent of Insurance Tzipi Samet told "Globes" today, "We received an opinion from the State Attorney’s office stating that the sale of insurance by the banks is not in accordance with the law, and is in contrast to the Control of Insurance Law. We are waiting for their decision regarding the steps that should be taken.
There was no comment from the State Attorney’s office.
Published by Israel's Business Arena June 8, 1998