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The Chilean Chamber of Deputies adopted a new regulation for the design of bidding rules for mortgage-related insurances, based on FNE’s recommendations

04 / 03 / 2021

The Chilean Chamber of Deputies approved a new regulation in order to improve the tender processes for mortgage-related insurances on Tuesday, which included the suggestions made by the FNE -the Chilean Competition Authority- to the government in 2019 in order to boost competitiveness in this industry.

This new regulation adds additional accountability provisions and strengthens the obligations of the lending or credit institutions. In addition, it forbids lenders from forcing insurers to add the services of an insurance broker in their offers, which were provided in many cases by a related company, and removes the institution’s exclusive right to replace the broker included in the awarded bids with one of its choosing. Furthermore, it bans any direct or indirect commission or payment in favour of lenders for the provision of such insurance.

According to the FNE´s estimate, the new regulation will led to savings between US$ 28.2 million and US$ 37.8 million each year for consumers.