Microinsurance Regulatory Framework

Microinsurance Regulatory Framework  Geraldine Desiderio  Country Bankers Life  2010 RBAP‐MABS Na.onal Roundtable Conference  2010 RBAP‐MABS Na.onal Roundtable Conference  Hya= Hotel and Casino, Manila  Hya= Hotel and Casino, Manila  June 2‐3, 2010  June 2‐3, 2010 

Vision To have a viable and sustainable private micro (financial) market with the government providing a supportive and appropriate policy environment to the market. Objective To provide access to financial services (microinsurance included) to the majority of the poor households and microenterprises.

What is Microinsurance? Microinsurance refers to the insurance, insurance-like and other similar business activity of providing specific products and services that meet the needs of the poor risk protection and relief against distress, misfortune or contingent event. Who Can Provide Microinsurance Contracts? 1. Commercial Life Insurance Companies 2. Commercial Non-Life Insurance Companies 3. Mutual Benefit Associations 4. Cooperative Insurance Societies 5. Pre-need Companies 6. Health Maintenance Organizations

What is Required of Microinsurance Providers? 1. Prudential Requirements 2. Market Conduct Requirements  Payment and Settlement of Claims  Documentary Requirements  Filing of Complaints  Know Your Client (KYC) Requirement  Governance Requirements

Who Can Sell Microinsurance Products? 1. Only Providers, agents and brokers licensed by the concerned regulatory authority shall be allowed to sell microinsurance products. 2. A microinsurance agent/broker shall be licensed to sell only microinsurance products. 3. Regular agents/brokers shall be allowed to sell microinsurance products and services. 4. Institutions engaged in microfinance activities may apply and be licensed as microinsurance agents/brokers, provided the license shall only cover the solicitation of microinsurance products. 5. Microinsurance Brokers shall be required and paid-up capital to half of what is required for regular brokers.

Key Features of a Microinsurance Contract I. The following features are applicable to life and non-life microinsurance contracts: A. Coverage B. Period of Cover C. Risk and Contingent Events Covered D. Terms and Conditions E. Effectivity F. Claims Settlement G. Dispute Resolution

Key Features of a Microinsurance Contract con’t. II. The following apply to life microinsurance contracts only: A. Grace Period B. Contestability C. Suicide Clause III. In the case of non-life microinsurance contract, the provider shall send notices to the microinsurance clients at least 45 calendar days prior to expiration of the contract. Such notice shall include in clear terms whether the contract may or may not be renewed and any changes to be made thereon, if renewed

Vision To have a viable and sustainable private micro (financial) market with the government providing a supportive and appropriate policy environment to the market. Objective To provide the poor increased access to microinsurance products and services.

Key Stakeholders respective roles: a. Government – Government shall support and encourage the participation of private insurance providers in offering appropriate risk protection to the poor. Government instrumentalities shall focus on the following: i. Policy and Regulatory Agencies ii. Other National Agencies and Instrumentalities iii. Local Government Units (LGUs) iv. Social Insurance Providers b. Insurance and insurance-like providers – Private insurance and insurance like providers shall take lead role in directly providing microinsurance products and services to the poor.

Key Stakeholders respective roles con’t.: c. Intermediaries – Refer to entities or individuals such as brokers and agents that shall facilitate the provision of insurance services by licensed insurance providers. d. Support Institutions – Support institutions shall provide the necessary support services and assistance to build the capacity of key stakeholders in microinsurance. e. Development partners – Development partners are international organizations, be it publicly or privately owned, and individuals of good reputation that support the development thrusts of the government.

Strategies to be pursued To realize the objective of providing poor households and microenterprises greater access to microinsurance products and services, the following specific strategies shall be pursued: a. Provision of an appropriate policy and regulatory environment that is conductive to the effective and efficient functioning of the private microinsurance market. b. Mainstreaming informal insurance c. Institutionalization of Financial Literacy

BSP requirements to the bank/s in selling microinsurance products: 1. Copy of duly executed written agreement between the bank and the insurance provider on the presentation, sale and servicing by the bank of the financial products of the latter, including the terms of compensation for the services; 2. Copy of the letter of approval from the Insurance Commission covering each of the microinsurance product to be marketed or sold by the bank; 3. Copy of the corresponding Certificate of Authority from the Insurance Commission of the insurance provider/s issuing the microfinance products to be marketed or sold; 4. Bank’s License from the Insurance Corporation as a microinsurance agent or broker, as may be applicable.

Microinsurance Regulatory Framework

by MABSIV on Jun 11, 2010

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Microinsurance Regulatory Framework — Presentation Transcript