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Insurers “awash in gold” with life insurance and pensions

SD. Up until November 2013, the five insurance companies authorized to issue disability and survivors insurance had received RD$16.497 billion, according to revelations from the Superintendency of Pensions (Sipen) in their monthly statistical bulletin.

Supposedly, this money, which the insurance companies have been accumulating since September 2013, covers the premiums for insurance that protects the affiliated workers and their families in cases of death or disability before reaching retirement age.

Nevertheless, as of November 2013, the pensions which have been granted for disability and survivors benefits have barely been issued to 7,003 persons.

The quarterly bulletin from September 2013 from Sipen reveals that the average amount of a disability pension is about RD$6,500 and the survivors benefits (which are received by the children and spouse of the worker when he dies before retirement) are about RD$8,900.

This means that during 2013 the total amount spent on pensions by the five insurance companies was around RD$713 million.

During the years before 2013, these payments were less because the pensions granted and the average pensions were less the further back from 2013 they were granted.

In the best of cases, if it were assumed that since 2004 the insurance companies have paid RD$713 in pensions each year, this would mean that on the other hand they would have kept the stratospheric difference of RD$9.365 billion, equal to 131% of the total paid out in pensions since the start of the Dominican Social Security System.

But the earnings of the insurance companies are much further away than the earth’s stratosphere, which could be visualized if you estimate year by year what they have paid in pensions and what they have received from the dispersal of what was collected in life insurance premiums by Social Security.

In September 2013, the Superintendent of Pensions, Joaquin Geronimo, revealed that the insurance companies “even went so far as to pay the AFPs (related) for the return of money for their good performance of the premium.”

This statement alludes to the few pension requests that were approved, equal to just 49% of the requests from the clients.

“Without a doubt this has been a very, very lucrative business for the insurance companies,” Geronimo commented on this occasion.

Policy contacts violate rights

The insurance companies that operate in the Dominican System of Social Security are: Universal; Banreservas; Sura Insurance; Scotia Insurance; and Mapfre BHD. In August 2006, the Superintendency of Pensions approved the resolution on the Contract Policy for Disability and Survivors which the AFPs sign with these insurers.

In the contract it is stipulated that after two years the rights of policy holders are prescribed for the first two years in favor of the insurers, which is contrary to the SDSS Law.

Source – DiarioLibre

Category: DR News |

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Last updated March 30, 2017 at 10:54 AM
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