Insurers can lower commissions of PPR

The entry of the State in the market for complementary products for reform has emerged one of the critics of the industry: the high commissions of PPR - Savings Plan Reform.


The entry of the State in the market for complementary products for reform has emerged one of the critics of the industry: the high commissions of PPR - Savings Plan Reform.

The reaction of the private sector may have to spend the fall in costs charged, as admitted yesterday the president of the Portuguese Association of Insurers (APS), Jaime d'Almeida, a press conference in which again accusing the state of unfair competition.

"I admit that the insurers will have to pull the imagination and find ways to adjust the costs and, if necessary, may have to lower the commissions charged by PPR," acknowledged Jaime d'Almeida, for whom the state is violating the principles of healthy competition.

The APS returned yesterday to make harsh criticisms for the new Certificates of Reform of the State, which considers to be "direct competitors of PPR private, but in very unequal conditions." Apart from the differences in tax treatment and supervision, APS alert now for the lack of protection mechanisms of capital in the event of insolvency. Jaime d'Almeida recalls that insurers are required to ensure that 4% of mathematical provisions of the private products must be allocated to the protection of risk capital. In PPR, the provisions around the 10 billion euros, which means that 400 million euros have to be provided. However, this rule of protection is not imposed on the public system. For APS, "the fact that the state does not have this requirement, gives you a competitive edge in terms of management."

The lack of protection of capital may, according to APS, forcing the state to have to change the internal rules for the management of certificates of reform, or to make adjustments that are penalizadores for savers. And recalls the recent example of certificates of savings, which cuts in pay were "very bad for the saver." Target of criticism is still the lack of financial supervision on foreign public PPR, which contrasts with the private sector which is under the supervision of the Insurance Institute of Portugal and of the Committee on Market Securities.