SBS proposes to make credit card life insurance optional.

The recent proposal by the Superintendence of Banking, Insurance, and AFP (SBS) to modify the regulations regarding credit card death insurance has sparked intense debate in the financial sector and among consumers. This proposal, which seeks to make the insurance optional rather than a mandatory requirement, has significant implications for users of financial services in the country. Through a resolution project, the SBS states that death insurance will be optional, except for mortgage loans, where its purchase will remain mandatory.

The death insurance, which is currently a necessary condition when applying for a credit card, is intended to protect the debtor in the event of death or total and permanent disability. Its purpose is to ensure that, in such situations, the debt does not fall on the beneficiaries of the deceased or on the assets of the incapacitated debtor. With the new proposal, consumers would have the freedom to decide whether to purchase this insurance or not, a change that could alleviate the financial burden for many users who currently have to bear this cost mandatorily.

However, the elimination of this requirement is not without risks. While the option not to purchase the insurance may be attractive to some, it also leaves consumers unprotected against events that could lead to an inability to pay their debts. The SBS assures that the decision to make the insurance optional aims to promote greater transparency and competition in the insurance market, allowing users to choose the best option for their financial situation.

The superintendent of the SBS, Sergio Epinosa, presented before the Consumer Defense Commission of Congress to outline the details of the project. In this presentation, he emphasized the importance of public consultation, allowing the industry and consumers to present their opinions and suggestions. The initiative to make the project public on its institutional portal is a step toward transparency, although it also raises questions about how effective consumer protection mechanisms will be in a scenario where the purchase of insurance is voluntary.

In addition to reviewing death insurance, the SBS is evaluating an increase in the cap on fines that can be imposed on financial entities. Currently, the limit is set at 200 UIT, which could rise to 5,000 UIT. This change responds to the need for more deterrent penalties against infractions committed by institutions. Both international organizations and the Organization for Economic Cooperation and Development (OECD) have indicated that the current regulations are insufficient to ensure consumer protection.

The possibility of increasing fines has been well-received by some sectors, who believe that greater economic pressure on financial entities could translate into better customer service. However, there is also the risk that these measures could result in additional costs that consumers might end up bearing through higher fees or interest rates.

The discussion about death insurance and the fines imposed on financial institutions highlights the need for a balance between consumer protection and market viability. While the SBS aims to empower consumers by offering them more options, it is essential that this freedom does not become a disadvantage. Consumers must be well-informed about the implications of not purchasing insurance, as well as the available alternatives.

On the other hand, the potential elimination of the mandatory nature of death insurance could open the door to new offers and products in the insurance market. With the competition that would arise from making this an optional product, insurance companies might be incentivized to improve their proposals, offering more accessible insurance tailored to consumers' needs.

In this context, consumers must remain attentive to the development of this proposal and actively participate in the consultation process. It is crucial that the voices of users are heard in decision-making that affects their financial well-being. Consumer protection and transparency in the market are fundamental pillars for the development of a fairer and more equitable financial system.

The SBS has the responsibility to ensure that any changes it implements benefit not only financial entities but also prioritize the well-being of consumers. Financial education and clarity in information will be essential for users to make informed decisions about their financial future in an ever-evolving environment.