1. Conducive Environment: Role of Governments and Regulators Creating Regulatory Frameworks For Microinsurance Regional Workshop on Microinsurance Sector Development Colombo, Sri Lanka 28-29 June, 2007 Arup Chatterjee Principal Administrator [email_address] Basel, Switzerland

4. Framework for Insurance Supervision the insurance sector and insurance supervision basic conditions for the effective functioning of financial governance market conduct supervisory assessment and intervention the insurance supervisory authority preconditions regulatory requirements supervisory action LEVEL 1 LEVEL 2 LEVEL 3 the insurance sector and insurance supervision basic conditions for the effective functioning of financial governance market conduct supervisory assessment and intervention the insurance supervisory authority preconditions regulatory requirements supervisory LEVEL 1 LEVEL 2 LEVEL 3 Common Solvency Structure and Standards

6. Definition Microinsurance is insurance that is accessed by low-income population , provided by a variety of different entities, but run in accordance with generally accepted insurance practices (which should include the Insurance Core Principles). Importantly this means that the risk insured under a microinsurance policy is managed based on insurance principles and funded by premiums . The microinsurance activity itself should therefore fall within the purview of the relevant domestic insurance regulator/ supervisor or any other competent body under the national laws of any jurisdiction.

13. Issues- Upgrading Formalising Insurance Schemes 6) Are donors and governments distorting incentives for commercial microinsurance? Overabundance of donor and government funding limits the attractiveness of microinsurance to investors. Large subsidies prevent the emergence of competitive commercial operations that can compete. Donor funding, while well intentioned, competes with investor risk capital