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Newsletter for financial enterprises in the Caribbean Netherlands

11th edition - 15 August 2016
Dear relation,
You are receiving this 11th newsletter for financial enterprises on Bonaire, Sint Eustatius and Saba.

If you prefer to read the newsletter in Dutch follow this link:

  Link to newsletter in Dutch
Topics in this newsletter:
  Outcomes of investigation into life insurance commissions and tie-in sales
  Investigation into interest rate percentages for consumer credit
 Notification of all antecedents of incumbent executive and supervisory board members
  Timely notification and assessment of board members/policy makers
  Does the Wfm BES also apply to the commercial market?
Outcomes of investigation into life insurance commissions and tie-in sales 
The AFM conducted an investigation into commissions on life insurance policies and the ban of tie-in sales in the Caribbean Netherlands in Q1-Q2 2016. It appears from the investigation that the life insurance market, not including term life insurance, is very limited and that the commissions are not unreasonably high.

However, it has become clear that the market for term life insurance is relatively large and that considerable commissions are received on term life insurance policies. Furthermore, the amount of the commission is not being disclosed to the customer by all enterprises. The AFM will investigate commissions on term life insurance further in Q3-Q4 2016.

From the investigation into tie-in sales, the AFM concludes that the enterprises that were examined do not oblige their customers to purchase additional products or services. It also came to the fore in the investigation that a high percentage of customers do purchase additional products or services from the same enterprise. The AFM does point out to enterprises that this could concern implicit tie-in sales: a customer is not obliged to purchase an additional product or service from the enterprise, but is actively steered to purchase this from the enterprise. The AFM considers such steering to be undesirable. The AFM will examine how the enterprises in question have acted on the recommendations in Q3-Q4 2016.

Investigation into interest rate percentages for consumer credit
Following signals, the AFM conducted an investigation in the beginning of this year into interest rate percentages as these are stated in consumer credit contracts. It turned out that the enterprises in question had stated the nominal interest rate instead of the effective interest rate in the concluded consumer credit contracts. In the meantime, these enterprises have informed their customers about the omission in writing.

Report antecedents of incumbent executive and supervisory board members
Reliable and ethical executive and supervisory board members are crucial for the integrity of the financial sector. The AFM and the Dutch Central Bank (DNB) call on financial enterprises and executive and supervisory board members to notify them of relevant facts regarding their properness. Properness is an ongoing requirement. Changes not only have to be notified during the initial assessment process, but also afterwards if there are changes concerning relevant facts and circumstances.

You can report the facts via, accompanied by an explanation. Insurance companies and banks are required to notify the DNB, providers of credit that are not banks and intermediaries are required to notify the AFM.

Criminal, financial, regulatory, tax, administrative and other antecedents have to be reported. Some examples of these other items are use of the tax amnesty (voluntary disclosure of deposits abroad, with or without the imposition of a penalty), a tax audit resulting in significant adjustments but no penalty or personal default penalties.

Timely notification and assessment of board members/policymakers
Prior to their appointment, policymakers of, for instance, advisers, intermediaries, authorised agents and credit providers must be assessed by the AFM. The policy maker may only be appointed after the AFM has given its approval. Therefore, changes should be notified at least two months before the planned appointment. You can find the document on the AFM website under Forms for the Caribbean Netherlands.

  Forms for the Caribbean Netherlands

Your question to the AFM: Does the Wfm BES also apply to the commercial market? 
Yes. Section 1.1 of the Financial Markets Act BES (Wet financiële markten BES (Wfm BES)) contains a definition of the term customer. A customer can be, for example, a person; a natural person or a legal entity. Therefore, SMEs and self-employed professionals are also regarded as customers. A customer is a person other than a professional market party to whom a financial enterprise offers, for example, an insurance policy.

A professional market party is only a collective investment scheme, credit institution, pension fund, portfolio manager, insurer or other party to be designated by an Order in Council.

If you have any questions with regard to this newsletter, please send an email to
More information can be found on the Caribbean Netherlands website
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