Six of the Netherlands larger financial institutions charge fees of up to 80% for some sorts of credit insurance, according to a confidential report from the financial services regulator AFM, quoted by the Financieele Dagblad.
The charges are not much less than the fees levied by DSB bank, which is on the verge of bankruptcy after angry customers withdrew their savings.
The report, covering charges between 2006 and 2008, was sent to the finance ministry in June. In it the AFM calls for a 25% maximum for the fees insurance agents earn on single premium insurance policies (koopsompolis).
Three of the six insurance companies which the researchers focused on sold single premium consumer credit insurance policies. Those fees accounted for between 25% and 86% of the total premium. The average was 80%, in line with the fees charged by DSB, the FD points out.
Two weeks ago, finance minister Wouter Bos described the fees charged by DSB as ‘idiotic’.
The fees on insurance to cover mortgage payments averaged 41% but were as high as 71%, the AFM said.
The report did not name the financial institutions involved.