Andrea E. Keenan
Vice President – Research & Ratings Criteria
Key Issues in the Licensing, Supervision
and Regulation of M...
Disclaimer
© AM Best Company (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HER...
Agenda
1. Insurance Regulation Standard Objectives
2. Current Global Climate for Insurance Regulators
3. The Fit of Microi...
Agenda
1. Insurance Regulation Standard Objectives
2. Current Global Climate for Insurance Regulators
3. The Fit of Microi...
Regulators and Microinsurance
• Regulators have two major objectives:
1. Ensure the protection of policyholders.
2. Provid...
Regulators and Microinsurance
• Regulators have two major objectives:
1. Ensure the protection of policyholders.
2. Provid...
Regulators and Microinsurance
• Regulators have two major objectives:
1. Ensure the protection of policyholders.
2. Provid...
Agenda
1. Insurance Regulation Standard Objectives
2. Current Global Climate for Insurance Regulators
3. The Fit of Microi...
Global Regulatory Framework
Standard Setting Bodies
G-20
IMF
International Currency
FX Stability
Emergency Funds
FSAPs
Wor...
G-20
• The Group of Twenty (G-20)
Finance Ministers and Central
Bank Governors was
established in 1999.
– Financial crises...
G-20
• 2012 Mexico Presidency
– “Financial inclusion is a key
component in the
development of
healthy, vibrant and stable
...
Global Regulatory Framework
Standard Setting Bodies
G-20
IMF
International Currency
FX Stability
Emergency Funds
FSAPs
Wor...
Global Regulatory Framework: IMF &
World Bank
• International Monetary Fund
– Financial Stability
Assessment Program
• Wor...
Global Regulatory Framework: IAIS
• Established in 1994.
• Sets standards “Insurance Core
Principles.”
• IAIS’s G20 Mandat...
International Association of Insurance
Supervisors (IAIS)
• IAIS and Financial Inclusion
– Joint Working Group (JWG) on Mi...
Agenda
1. Insurance Regulation Standard Objectives
2. Current Global Climate for Insurance Regulators
3. The Fit of Microi...
Microinsurance a Natural Fit
September 20, 2013ICMIF-AOA Development Network Seminar
Making Micro Possible
September 20, 2013ICMIF-AOA Development Network Seminar
IAIS Issues Paper 2013
• Making Insurance Approachable and Accessible to the
Targeted Groups
– Financial Literacy
– Produc...
Conclusions
• State of Global Regulation Currently is Accommodating
for Development of Financial Inclusion
– Encourages Gl...
Andrea E. Keenan
Vice President – Research & Ratings Criteria
Thank You
ICMIF-AOA Development Network Seminar
September 20...
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Key issues in the licensing, supervision and regulation of microinsurance and mutuals (by AM Best, USA)ision of microinsurance in Cambodia

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This presentation was delivered by Ms Andrea Keenan (Vice-President-Research and Ratings Criteria Relations & Training at AM Best, USA) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines).

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  • If you are looking for financial inclusion in Southeast Asia, microinsurance is a natural fit due to the demographics
  • It’s my belief that mutuals and cooperatives are in the best position to make this happen.
  • Key issues in the licensing, supervision and regulation of microinsurance and mutuals (by AM Best, USA)ision of microinsurance in Cambodia

    1. 1. Andrea E. Keenan Vice President – Research & Ratings Criteria Key Issues in the Licensing, Supervision and Regulation of Microinsurance and Mutuals September 20, 2013 A.M. Best - Oldwick, NJ ICMIF-AOA Development Network Seminar
    2. 2. Disclaimer © AM Best Company (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT AMB’s PRIOR WRITTEN CONSENT. All information contained herein is obtained by AMB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall AMB have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of AMB or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if AMB is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor does it address the suitability of any particular financial obligation for a specific purpose or purchaser. Credit risk is the risk that an entity may not meet its contractual, financial obligations as they come due. Credit ratings do not address any other risk, including but not limited to, liquidity risk, market value risk or price volatility of rated securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY AMB IN ANY FORM OR MANNER WHATSOEVER. Each credit rating or other opinion must be weighed solely as one factor in any investment or purchasing decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security or other financial obligation and of each issuer and guarantor of, and each provider of credit support for, each security or other financial obligation that it may consider purchasing, holding or selling. September 20, 2013ICMIF-AOA Development Network Seminar
    3. 3. Agenda 1. Insurance Regulation Standard Objectives 2. Current Global Climate for Insurance Regulators 3. The Fit of Microinsurance (and Mutuals) into This Framework September 20, 2013ICMIF-AOA Development Network Seminar
    4. 4. Agenda 1. Insurance Regulation Standard Objectives 2. Current Global Climate for Insurance Regulators 3. The Fit of Microinsurance (and Mutuals) into This Framework September 20, 2013ICMIF-AOA Development Network Seminar
    5. 5. Regulators and Microinsurance • Regulators have two major objectives: 1. Ensure the protection of policyholders. 2. Provide access to insurance to the population. September 20, 2013ICMIF-AOA Development Network Seminar
    6. 6. Regulators and Microinsurance • Regulators have two major objectives: 1. Ensure the protection of policyholders. 2. Provide access to insurance to the population. 1. Microinsurance and Policyholder Protection • Providers of insurance in a domicile must be regulated for the protection of their customers. • But, regulations are often too high-cost to be within the business plan of a viable microinsurer. September 20, 2013ICMIF-AOA Development Network Seminar
    7. 7. Regulators and Microinsurance • Regulators have two major objectives: 1. Ensure the protection of policyholders. 2. Provide access to insurance to the population. 2. Microinsurance and Access to Insurance • Microinsurance is an attractive solution to regulators who are focused on risk protection reaching the less wealthy populations. • But, regulations are often too high-cost to be within the business plan of a viable microinsurer. September 20, 2013ICMIF-AOA Development Network Seminar
    8. 8. Agenda 1. Insurance Regulation Standard Objectives 2. Current Global Climate for Insurance Regulators 3. The Fit of Microinsurance (and Mutuals) into This Framework September 20, 2013ICMIF-AOA Development Network Seminar
    9. 9. Global Regulatory Framework Standard Setting Bodies G-20 IMF International Currency FX Stability Emergency Funds FSAPs World Bank Economic Development Poverty Reduction Microinsurance Financial Stability Board (FSB) Devises, coordinates and monitors implementation of global financial regulations BCBS FASB IOSCO IAIS September 20, 2013ICMIF-AOA Development Network Seminar
    10. 10. G-20 • The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established in 1999. – Financial crises of late 1990s. • Predecessors: – G-7 – G-22 – G-33 • Common theme: reduce the world economy's susceptibility to crises. September 20, 2013ICMIF-AOA Development Network Seminar
    11. 11. G-20 • 2012 Mexico Presidency – “Financial inclusion is a key component in the development of healthy, vibrant and stable financial systems contributing to sustainable economic growth.” • 2013 Russia Presidency – Build off of 2012 theme with a focus on financial literacy and access to financial services by women, migrants and the youth. September 20, 2013ICMIF-AOA Development Network Seminar
    12. 12. Global Regulatory Framework Standard Setting Bodies G-20 IMF International Currency FX Stability Emergency Funds FSAPs World Bank Economic Development Poverty Reduction Microinsurance Financial Stability Board (FSB) Devises, coordinates and monitors implementation of global financial regulations BCBS FASB IOSCO IAIS September 20, 2013ICMIF-AOA Development Network Seminar
    13. 13. Global Regulatory Framework: IMF & World Bank • International Monetary Fund – Financial Stability Assessment Program • World Bank – Educational assistance – Financial Assistance – Microinsurance Initiatives and Technical Expertise 20 IMF International Currency FX Stability Emergency Funds FSAPs World Bank Economic Development Poverty Reduction Microinsurance September 20, 2013ICMIF-AOA Development Network Seminar
    14. 14. Global Regulatory Framework: IAIS • Established in 1994. • Sets standards “Insurance Core Principles.” • IAIS’s G20 Mandate – Systemic Risk and Group Regulation – Financial Inclusion Standard Setting Bodies G-20 IMF International Currency FX Stability Emergency Funds FSAPs World Bank Economic Development Poverty Reduction Microinsurance Financial Stability Board (FSB) Devises, coordinates and monitors implementation of global financial regulations BCBS FASB IOSCO IAIS September 20, 2013ICMIF-AOA Development Network Seminar
    15. 15. International Association of Insurance Supervisors (IAIS) • IAIS and Financial Inclusion – Joint Working Group (JWG) on Microinsurance • 2012 established Financial Inclusion Subcommittee – Current / Recent Microinsurance Work • Application Paper on Regulation and Supervision Supporting Inclusive Insurance Markets Concluded October 2012 • Issues Paper on Market Conduct, Distribution and Consumer Protection in Inclusive Insurance Markets Draft Paper 2013 – Application Paper on Mutuals, Cooperatives and Community-Based Organizations Drafting begun July 2013 September 20, 2013ICMIF-AOA Development Network Seminar
    16. 16. Agenda 1. Insurance Regulation Standard Objectives 2. Current Global Climate for Insurance Regulators 3. The Fit of Microinsurance (and Mutuals) into This Framework September 20, 2013ICMIF-AOA Development Network Seminar
    17. 17. Microinsurance a Natural Fit September 20, 2013ICMIF-AOA Development Network Seminar
    18. 18. Making Micro Possible September 20, 2013ICMIF-AOA Development Network Seminar
    19. 19. IAIS Issues Paper 2013 • Making Insurance Approachable and Accessible to the Targeted Groups – Financial Literacy – Product Design and Policy Language • Creating Client Value – Claims Settlement and Payments – Complaints Handling • Sustainable Industry – Performance of Insurers September 20, 2013ICMIF-AOA Development Network Seminar
    20. 20. Conclusions • State of Global Regulation Currently is Accommodating for Development of Financial Inclusion – Encourages Global Attention on Innovations in Microinsurance – Mutual and Cooperative Organizations Have an Important Role to Play • Global Community Benefits from Communication of Country-Level Experiences September 20, 2013ICMIF-AOA Development Network Seminar
    21. 21. Andrea E. Keenan Vice President – Research & Ratings Criteria Thank You ICMIF-AOA Development Network Seminar September 20, 2013 A.M. Best - Oldwick, NJ

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