MICRO-INSURANCE INITIATIVE BY:DR. PRAXEDES A. IGNACIOPresident and Chief Executive OfficerMallig Plains Rural Bank (Isabela), Inc.
PROCEDURES: January 27-28, 2011 *Two (2) bank representatives attended the prescribed Basic Micro-insurance Training conducted by MABS March 09-11, 2011 *Officers of the bank attended the Micro- insurance Training conducted by our insurance provider.
April 29, 2011 *The Bangko Sentral ng Pilipinas approved our request for a “No Objection Notice”. September 2, 2011 *Insurance Commission issued our License as Micro-insurance Agent. October 24, 2011 *Insurance Commission endorsed to the Securities and Exchange Commission for the registration of the amended Articles of Incorporation on the secondary purpose “to sell, solicit, or market insurance products and services as an insurance agent, especially for micro-insurance products issued by life and non-life insurance companies, authorized by the Insurance Commission
December 28, 2011 *Letter of BSP informing us that the Monetary Board in its Resolution No. 1759 dated November 24, 2011 approved our request for authority to act as Micro-insurance Agent. February 09, 2012 *Approval by the Securities and Exchange Commission (SEC) of the certificate of filing of amended Articles of Incorporation.
BENEFITS DERIVED BY THE BANK:1. Our bank has a significant influence on micro- insurance towards our microfinance clients and micro-depositors and the offshoot of the general openness of micro-insurance motivated us to offer and provide better and expanded services to members;2. Increase in outreach (micro-borrowers and micro-depositors);3. Increase in loan portfolio and deposits; and4. Reduce our credit risk
BENEFITS OF CLIENTS:1. Risk Protection In times of hardships, for example: when a member of a family dies, hospitalized or met an accident, they are not forced to take out another loan with high interest rate because of the following benefits: a. Death benefit b. Accidental death and Permanent disability c. Accidental medical reimbursement d. Daily confinement benefit e. Instant Abuloy f. Financial assistance due to fire or natural calamities
2. Growth of livelihood projects; and2. Savings are not depleted in time of emergencies or crises
CHALLENGES:1. Policy changes and revision of existing rules and regulations by our regulators;2. High costs of continuous training of staff to handle micro-insurance, trainings of clients and marketing;3. Changes in the level of benefits, frequency and affordability of level of premium payments;
4. Adverse selection problem on high-risk persons, i.e: persons over 65 years old, persons with pre- existing health problems and high risk occupations; and5. Efficient and effective delivery of micro-insurance products and the viability, growth and development of micro-insurance industry.