The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) approved BPI-Philam Life Assurance Corp.’s request to purchase up to $70 million from the local banks which it would use for investment in dollar-denominated Philippine bonds.

BPI-Philam Life will buy foreign exchange (FX) from central bank-authorized agent banks or its subsidiary or affiliate FX corporations.

BSP sources said the Monetary Board approved the purchase of $40 million since the first $30 million will not need prior BSP approval based on Section 44 of the Manual of Regulations for FX Transactions.

Based on documents submitted to the Monetary Board, the insurer will use the FX to invest in ROPs due 2015 as part of its “Max Protect” product. This new product is a peso-denominated life insurance which will have minimum face amount of P250,000 or more. BPI-Philam Life is targeting P3.2 billion policies to be sold in the next months. The funds to be raised amounting to $68.8 million will be invested in dollar-denominated ROPs.

Bank of the Philippine Islands (BPI), the country's third biggest, earlier sought central bank's approval to cross-sell two insurance products following the creation of BPI-Philam Life, a partnership between BPI and Philam Life after the former sold 51 percent in Ayala Life Assurance.

BPI has applied for authority to allow BPI and BPI-Philam Life to cross-sell or distribute one of its new life series called "Participating Limited-Pay Whole Life Plans with Triennial Cash Benefits" and "Non-Participating Riders." BPI wants to carry the products in its main or head office and branch network.

BPI-Philam Life, formerly Ayala Life, is the bancassurance of BPI.

Philam Life, the biggest insurer with 250,000 agents, is a unit of the AIA Group. Ayala Life, in the meantime, is the sixth largest out of 32 life insurers. Philam Life entered into a joint venture with BPI last November to take advantage of the bank's 800 branches.