Helping Rural banks Comply with Microinsurance Regulations

2010 RBAP-MABS NATIONAL ROUNDTABLE CONFERENCE “Microfinance: From Best Practice to Next Practice” June 2-3, 2010 Hyatt Hotel and Casino, Manila HELPING RURAL BANKS COMPLY WITH MICROINSURANCE REGULATIONS By: VIDA T. CHIONG Deputy Insurance Commissioner

Microfinance and Microinsurance : Complementary Partners in Poverty Alleviation 1

Intro….. BSP Circular No. 683 Series of 2010 ….” allowing rural, cooperative and thrift banks to present, market and sell microinsurance products.” A major breakthrough for the Microinsurance Program 2

MICROINSURANCE PRODUCTS AND CONTRACTS WELCOME TO MICROINSURANCE 3

MICROINSURANCE PRODUCT Daily Premiums/Contributions  not more than 5% of the current daily minimum wage rate (P19.00) Guaranteed Benefits  not more than 500 times the current daily minimum wage rate (P190,000.00) The maximum amount of premium and guaranteed benefits applies on a per product or per policy basis. 4

Microinsurance Contract  Coverage  Period of Cover  Risk & Contingent Events Covered  Terms & Conditions  Effectivity  Claims Settlement  Dispute Resolution 5

For Life Microinsurance Contracts:  Grace Period - maximum of 45 calendar days from due date of premium  Contestability - 1 year from effective date or date of last reinstatement of the contract  Suicide Provision - 1 year from the effective date or date of last reinstatement of the contract 6

A microinsurance contract should bear a microinsurance logo to distinguish it from other insurance products. 7

LICENSING REQUIREMENTS AND PROCEDURES (PROPOSED)  Microinsurance agents/brokers shall not required to take the regular licensure examination, but: • shall have to undergo an approved Microinsurance Training Program; and • pass a qualifying examination at the end of the Program. 8

Licensing…..  Licensed regular agents/brokers shall be allowed to sell microinsurance products  Microinsurance agents/brokers are being considered to sell only microinsurance products  Minimum Paid-Up Capital Requirement • Microinsurance general agent – P125,000.00 • Microinsurance broker – P10 M 9

Licensing…..  Microfinance institutions (e.g. rural banks) may be licensed provided that:  the institution is empowered under its articles of incorporation to transact microinsurance business  the application shall be accompanied by: • a copy of general agency agreement between the institution and the insurance company; • a copy of the power of attorney executed by the insurance company empowering it to receive notices, summons and legal processes 10

Licensing…..  Cannot be licensed as a Microinsuranc broker and Microinsurance agent at the same time.  The license expires June 30 of each year and may be renewed if in compliance with rules and regulations. 11

CONCLUSION Twin Pillars for the Development of Microinsurance  National Strategy  Regulatory Framework 12

Ongoing Thrusts  Formulation of Performance Standards  Microinsurance Products Development  Financial Literacy 13

3rd International Conference on Microinsurance Manila, Philippines 8-11 Nov. 2010 14

INSURE TO BE SURE THANK YOU 15

Helping Rural banks Comply with Microinsurance Regulations

by MABSIV on Jun 11, 2010

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Helping Rural banks Comply with Microinsurance Regulations — Presentation Transcript