This presentation was delivered by Mr Mey Vann (Director at Financial Industry Department, Cambodia) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines).

1. MINISTRY OF ECONOMY AND FINANCE
Key Issues in Licensing and Supervision of
Microinsurance in Cambodia
18-20 September 2013, Makati City
KINGDOM OF CAMBODIA
Nation - Religion - King
MEY VANN
Director of Financial Industry Department
Ministry of Economy and Finance
meyvann@live.com
1

2. CONTENT
A. Country Overview
B. Insurance Market In Cambodia
C. Microinsurance Development
D. Financial Sector Development
Strategy 2011-2020
E. Key Issues in Licensing and
Supervision of Microinsurance
2
Financial Industry Department
Insurance Division

3. A. Country Overview
3
Financial Industry Department
Insurance Division

4. A. Country Overview
4
Financial Industry Department
Insurance Division
Population: 14.7M (MEF, 2013)
Population in Phnom Penh: 2,009,264
Area: 181,035 sq km (69,898 sq miles)
GDP: 15,191M USD(MEF, 2013)
GDP per capita: 1,036 USD (MEF, 2013)
GDC Growth rate within 10 years

5. A. Country Overview
5
Financial Industry Department
Insurance Division
INTEREST RATE ON DEPOSITS ( in January 2013)
Deposit in Riel (%) Deposit in USD (%) Deposit in Other Foreign Currency (%)
Saving Fixed Saving Fixed Saving Fixed
1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M.
1.13 2.46 3.3 4.06 4.86 0.81 1.85 2.5 3.25 4.04 0.58 3.31 3.08 3.33 3.65
INTEREST RATE ON LOAN ( in January, 2013)
Loan in Riel (%) Loan in USD (%) Loan in Other Foreign Currency (%)
1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M. 1 M. 3 M. 6 M. 12 M.
13.95 13.95 13.95 14.26 13.34 12.37 12.87 13.05 11.75 8.72 10.38 10.41

6. B. Insurance Market in
Cambodia
6
Financial Industry Department
Insurance Division

7. B. Insurance Market in Cambodia
7
Financial Industry Department
Insurance Division
2005 2006 2007 2008 2009 2010 2011 2012
Pernetration Rate 0.17% 0.17% 0.20% 0.20% 0.19% 0.21% 0.23% 0.26%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
Insurance Penetration Rate
2005-2012

8. 8
Financial Industry Department
Insurance Division
B. Insurance Market in Cambodia
2005 2006 2007 2008 2009 2010 2011 2012
Premium $10,847,914 $12,128,944 $17,493,747 $20,671,279 $20,012,934 $24,755,038 $30,221,375 $35,962,796
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
Premium Growth 2005-2012 in Cambodia
Microinsurance
Aug 2011
Life insurance
May 2012

9. Types of
Company
General
Insurer Life
Insurer
Reinsurer MI
NGOs
Pilot
Scheme
Broker Agent Total
Private
Company
5 2 1 6 1 3 18
Joint
Venture 1 1 1
3
Total 6 3 1 1 6 1 3 21
9
Financial Industry Department
Insurance Division
Number of insurance companies and Distribution channels as at August 2013
B. Insurance Market in Cambodia

10. 10
Financial Industry Department
Insurance Division
C. Microinsurance Development
In Cambodia

11. C. Microisnurance Development
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Financial Industry Department
Insurance Division
 There are 74% of population which live in rural area
 There are 70 of MFIs in Cambodia as at January 2013 which are :
 37 licenses and
 33 certificate (NGOs) included the C.M.K is Credit Mutuel
 Loan grew from 2002 to 2010 at USD %51 millionin and USD$439
respectively. Number of MFI borrowers increased from 330,000 to
1.02million between the same period.

12. Financial Industry Department
Insurance Division 12
CMK 2010 2011 2012
Clients 1,291 2,566 3,666
Saving (USD) 1,099,120 2,510,177 4,831,322
Credit (USD) 567,562 1,301,714 2,137,211
C. Microisnurance Development

13. C. Microisnurance Development
In 2011, MEF issue a temporary license related to microinurance
that distinguished :
1. CBHI which is known as MHI (for non profit) : until now there are
6NGOs
1- HIP/ SKY was launch in 2003
2-CHC was launch in 2012
3-Other 4NGOs ( CAAFW, BFH, RACHA, CHHRA)
2. Micro insurance in Cambodia ( for Profit) : Prevoir (PKMI) was launch
since 2011
Financial Industry Department Insurance
Division
13

14. C. Microisnurance Development
Financial Industry Department Insurance
Division
14

15. C. Microisnurance Development
Financial Industry Department Insurance
Division
15
$105,036
$36,911 $27,978
$436
$27,640
$105,472 $64,551
$27,978
$51,324 $20,493
$6,684.19
$80,096 $52,611
$100,208.50
$(25,948) $(8,553)
$(78,915)
-40%
-20%
0%
20%
40%
60%
80%
100%
Profit and Loss of MHI and Microinsurance as at June 2013
Premium Collect Other/ Donation Total Income Claim Expense Admin cost Profit / (Loss)
SKY
PREVOIR
CHC
SKY
PREVOIR
CHC
SKY
PREVOIR
CHC
Micro Health Insurance Microinsurance Business

16. D. Financial Sector Development
Strategy 2011-2020
Financial Industry Department Insurance
Division
16

17. The current insurance industry and legal
frameworks are developed under the financial
sector development strategy (FSDS).
The strategy were updated three times since
2001.
The recent updated strategy (FSDS 2011-2020)
was issued by Royal Government of Cambodia
(RGC) on November 25, 2011.
17
Financial Industry Department
Insurance Division
D. Financial Sector Development Strategy
2011-2020

18. Development Policy
Area
Short -Term
Target 2011-2014
Medium -Term
Target 2014-2017
Long-Term
Target 2017-2020
Legal and regulatory
framework
-Develop legal framework for
life insurance and
Microinsurance
-licensing Life insurance and
Microinsurance business.
-Establish a supervisory body
for microinsurance
Review insurance
regulations to align with
the level of market
development and
consideration to apply to
Based Capital (RBC)
Enlarge microinsurance
coverage to the need of
the poor people.
Development of
private voluntary
pension
-Develop a legal and
regulatory framework for
private voluntary pension.
- Establishment private
pension supervisory body
- Introduction of private
voluntary pension
- Initiate training programs
to public and private
academic institutions.
Enlarge pension
coverage to the need of
the poor people.
18Financial Industry Department
Insurance Division
D. Financial Sector Development Strategy
2011-2020

19. E. Key Issues in Licensing and Supervision
of Microinsurance
Financial Industry Department
Insurance Division 19

20. E. Key Issues inLicensing and Supervision of
Microinsurance
In 2011, MEF issue circular on Issuance of Temporary License for Microinsurance
Condition of Temporary Licensing:
1/ Microinsurer:
-Minimum paid-up Capital : 150,000USD
-Deposit 50,000 with MEF
-Maintained 100,000USD as solvency margin
2/ Community Based Health Insurance Implementer (CBHI)
-Summit CBHI proposal scheme to MEF
-Shall have enough financial resource for at least 3years project
Financial Industry Department Insurance
Division
20
Licensing

21. E. Key Issues in Licensing and Supervision of
Microinsurance
All microinsurer and CBHI have to comply with :
1/ Fit and Proper requirement of the Management
2/ Restriction of size of a microinsurer
3/ Validity of license for microinsurer: valid for 1 year from the date of issuance .
4/ Microinsurer have to summit audited financial report within 3months after the
end of each fiscal year.
5/ licensee shall submit statistics and insurance business report such as
monthly, quarterly, semester report to MEF before 15th of each
month, quarter, and semester.
Financial Industry Department Insurance
Division
21
Supervision

22. Challenges
 Inadequate legal frame work and market infrastructure
 Shortages of skilled workers, education and public awareness, little experiences
 Remains a pilot with commercial insurers and NGOs
 Small market where the insurance premiums account for less than 0.3% of GDP
 Little retail distribution
 low product and distribution innovation
 Ineffective payment systems and banking penetration
 Insurance tax rate
 Retention capacity is low
Financial Industry Department
Insurance Division
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E. Key issues in Licensing and Supervision of
Microinsurance

23. E. key Issues in Licensing and Supervision of
Microinsurance
WAYS FORWARD: POTENTIAL FOR REPLICATION AND IMPLEMENTAION
 Insurance regulation is essential for expanding and building confidence
 Education and public awareness need to be addressed for both of
microinsurance and social protection
 Identify interventions on microinsurance and social protection
 Consensus and collective commitment from all concern authorities and
development partner
 Priority insurance products such as health and crop insurance
 Develop microinsurance through a sector base approach
Financial Industry Department Insurance
Division
23

24. Financial Industry Department
Insurance Division 24