Microinsurance Policy and Regulatory Reform Initiatives: The Philippines

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This presentation was delivered by Mr Joselito Almario (Deputy Executive Director at DOF-NCC, The Philippines) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines)

Published in: Economy & Finance, Business
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Microinsurance Policy and Regulatory Reform Initiatives: The Philippines

  1. 1. MICROINSURANCE: POLICY AND REGULATORY REFORM INITIATIVES - THE PHILIPPINES BUILDING TRUST, BUILDING BRIDGES “MUTUAL MICROINSURANCE: WHY? & HOW? FROM A REGULATORY PERSPECTIVE” ICMIF-AOA DEVELOPMENT NETWORK SEMINAR ‘IMPROVING ACCESS TO INSURANCE’ 18-20 SEPTEMBER 2013, MAKATI CITY JOSELITO ALMARIO DEPARTMENT OF FINANCE, PHILIPPINES
  2. 2. WHERE ARE WE BEFORE ABSENCE OF POLICY AND REGULATORY FRAMEWORK • Vague government policy direction • Unclear regulations and guidelines on microinsurance • Hesitant providers INAPPROPRIATE PRODUCTS • Not tailor-fitted • Unaffordable • Complex and complicated contracts • Cumbersome requirements LACK OF AWARENESS • Distrust of insurance providers • “Leave it to destiny” mentality • No immediate benefits • Additional financial burden
  3. 3. THE BEGINNINGS - 2006 • Microinsurance driven by successes in the microfinance sector • MFIs form informal insurance schemes, some MBAs, to meet insurance needs of their clients • Government responds by issuing guidelines for MBAs to deliver microinsurance • Policy adopts principle of proportionality
  4. 4. THE EXPANSION - 2009 TECHNICALWORKING GROUPS POLICY/ REGULATORY BODIES INSURANCE PROVIDERS (LIFE/NONLIFE - COMMERCIAL, COOPS, MUTUALS) INTERMEDIARIES MICROFINANCE INSTITUTIONS PUBLICCONSULTATIONS
  5. 5. WHAT WERE COVERED Market Conduct Product Innovation and Development Financial Literacy and Advocacy ConsumerValue and Protection POLICY AND REGULATORY ENVIRONMENT
  6. 6. WHAT WERE DONE 2010 2011 2012 • Microinsurance Defined • Microinsurance Providers Identified • Branding and SloganConceived • Formalization Process Clarified • MicroinsuranceAgents/Brokers Created (CBOs included) • Prototype Product Developed • Contracts Simplified • Performance Standards Formulated • Reporting Standards Established • MBAChart of Accounts Revised • Trainings on MIAdvocacy and Seminars • Alternative Dispute Resolution Mechanism Established July 2013
  7. 7. WHERE ARE WE NOW COMMERCIAL PROVIDERS • 2008 - 2 • 2012 – 35 (Life – 17, Non-life - 18) MUTUAL BENEFIT ASSOCIATIONS • 2008 - 6 • 2009 - 19 PRODUCTS APPROVED • 2008 – 7 • 2012 – 89 (Life – 38, Non-life – 25, MBAs – 26) INDIVIDUALS COVERED • 2008 – About 3 million (mostly credit life including informal insurance) • 2012 – 12 million
  8. 8. WHERE ARE WE HEADED Agriculture/ Catastrophic Microinsurance Parametric/ Index-based Products POS/ Technology – based Delivery Platforms
  9. 9. WHAT ARE THE LESSONS LEARNED Clear rules and regulations provide better understanding and transparency Consistency of implementation results in predictability – branding can help Financial literacy is educating, not marketing Advocacy is convincing, not selling Localized and simple alternative redress mechanisms promote effective after-sales service
  10. 10. A CONDUCIVE AND ENABLING POLICY AND REGULATORY ENVIRONMENT – BUILDS TRUST, BUILDS BRIDGES www.microinsurancephil.blogspot.com

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