The National Social Security Institute (INSS) and Caixa Seguridade, a subsidiary of Caixa Econômica Federal, signed an agreement to suspend the sale of credit life insurance linked to payroll-deductible credit operations offered to retirees and pensioners.
Known as “financial protection” or “credit life insurance”, the product is linked to the loan and covers the outstanding balance in the event of death, disability or other situations provided for in the contract.
According to the INSS, The measure seeks to guarantee the protection of beneficiaries and regularity in the granting of payroll loans.
Under the term of commitment, Caixa Seguridade committed to:
- temporarily suspend the provision of credit life insurance;
- prevent the commercial link between credit and insurance;
- maintain the release of the consignment without requiring insurance;
- wait for the conclusion of the administrative process to refund insurance unduly charged to retirees and pensioners;
- respect the contracting limit of up to 1.6 times the monthly benefit income;
- repay amounts borrowed above the contracting limit; and
- inform the INSS, every 60 days, of the progress of refunds.
The suspension will be valid for 30 days or until the conclusion of the administrative process that will analyze possible irregularities in insurance billing.
In a note, the INSS stated that the agreement “aims to ensure the defense of the interests of beneficiaries and full compliance with legislation when contracting payroll loans”.
Caixa Seguridade informed that it understands that it is in compliance with current regulations, but accepted the suspension “to assess the adequacy of the procedures and collaborate with the investigation process”.
Other banks
In June, the INSS suspended new credit authorizations assigned to policyholders. The decision came after an operation by the Federal Police and the Comptroller General of the Union (CGU) which identified undue discounts made by associations and entities of retirees and pensioners.
In August, the agency canceled cooperation agreements technique with eight financial institutions. In October, four more banks and financial institutions were authorized for INSS payroll operations suspended on a precautionary basis.
On October 30, the INSS signed a commitment so that the Banco BMG refunds more than R$7 million unduly charged to around 100 thousand beneficiaries. The amount will be deducted directly from the invoices.
