Microinsurance: Does Traditional Regulation Apply?

Microinsurance--insurance services for low-income households--has emerged as a phenomenon in recent years. This Policy Notes draws attention to the need for an effective regulatory and supervision framework for said phenomenon to assure access of low-income households to insurance and to maintain the soundness of the insurance industry.microinsurance, mutual benefit associations

Developing Principles for the Regulation of Microinsurance (Philippine Case Study)

Low income households find it hard to cope with the risks brought about by an illness or injury, death of a family member, man-made calamities and natural disasters. Demand for microinsurance products is growing and both formal and informal microinsurance schemes have started to emerge to address this need. This paper seeks to provide a better understanding of the micro-insurance market in the Philippines and to draw certain principles for micro-insurance regulation from a review of the Philippine experience with micro-insurance. The Philippine experience on the provision of micro-insurance services and the interaction between the insurance providers and the regulator may help inform the development of certain principles for micro-insurance regulation.Micro-insurance, regulatory framework, mutual benefit association, Insurance Commission, risk protection, partner agent approach

Developing Principles for the Regulation of Microinsurance: Philippine Case Study

Illness or injury, death of a family member, man-made calamities and natural disasters have a devastating effect on those poor households’ cash flow, liquidity and earning capacities and thus, on household welfare. Demand for micro-insurance products is growing in view of continuing risks to household welfare and the seeming inability of the government to address this issue. This study seeks to provide a better understanding of the micro-insurance market in the Philippines and to draw certain principles for micro-insurance regulation from a review of the Philippine experience with micro-insurance. The study describes how policies, legal, regulatory and supervisory framework governing insurance have shaped the development of the market and vice versa. The Philippine experience on the provision of micro-insurance services and the interaction between the insurance providers and the regulator may help inform the development of certain principles for micro-insurance regulation.micro-insurance, catastrophic events, moral hazard, market conduct regulation, product regulation

Making insurance markets work for the poor : microinsurance policy, regulation and supervision; Philippines case study

This document presents the findings from the Philippines component of a five-country case study on the role of regulation in the development of microinsurance markets, and considers the influence that policy, regulation and supervision have on their development. Microinsurance in the Philippines is fundamentally group-based and largely microfinance-driven and illustrates how MFI-based microinsurance can evolve beyond the provision of credit life insurance to also provide life, accident and capital health insurance to members. The findings emphasize the need for a comprehensive approach to policy, informed by and tailored to domestic conditions, and adjusted continuously as the environment evolves

Developing Principles for the Regulation of Microinsurance (Philippine Case Study)

Low income households find it hard to cope with the risks brought about by an illness or injury, death of a family member, man-made calamities and natural disasters. Demand for microinsurance products is growing and both formal and informal microinsurance schemes have started to emerge to address this need. This paper seeks to provide a better understanding of the micro-insurance market in the Philippines and to draw certain principles for micro-insurance regulation from a review of the Philippine experience with micro-insurance. The Philippine experience on the provision of micro-insurance services and the interaction between the insurance providers and the regulator may help inform the development of certain principles for micro-insurance regulation.micro-insurance, regulatory framework, mutual benefit association, Insurance Commission, risk protection, partner agent approach

Developing Principles for the Regulation of Microinsurance (Philippine Case Study)

Low-income households find it hard to cope with the risks brought about by an illness or injury, death of a family member, man-made calamities, and natural disasters. Demand for microinsurance products is growing and both formal and informal microinsurance schemes have started to emerge to address this need. This paper seeks to provide a better understanding of the microinsurance market in the Philippines and to draw certain principles for microinsurance regulation from a review of the Philippine experience with microinsurance. The Philippine experience on the provision of microinsurance services and the interaction between the insurance providers and the regulator may help inform the development of certain principles for microinsurance regulation.regulatory framework, microinsurance, mutual benefit associations, Insurance Commission, risk protection, partner agent approach

Microinsurance in the Philippines : Policy and Regulatory Issues and Challenges

This study assesses the state of micro-insurance in the country, identifies the players and their performance, and the challenges facing micro-insurance development. The term micro pertains to the capacity of a program to handle the small, sometime irregular cash flows of poor households, who have been excluded in the commercial insurance system for a variety of reasons. Micro-insurance products, specifically designed with the poor in mind, will help mitigate risks and reduce the vulnerability of poor households. The most prominent forms of micro-insurance are life insurance and health insurance (carried out as part of an overall health care package that links the health insurance to a health facility), which have been designed to be responsive to the need of poor households. The paper reports 17 players in the emerging micro-insurance industry, consisting of 12 cooperatives, three NGOs/MFIs, and two transport associations that are offering home-made micro-insurance. These home-made microinsurance products continue to be provided despite their actuarial weaknesses and lack of financial capacity of the providers because of very strong demand from their membership for such financial products. Given their advantages over commercial insurance companies, the mutual benefit associations (MBAs) are the usual vehicles of micro-insurance programs. In 2004, 18 MBAs were registered with the Insurance Commission (IC) with accumulated assets of PhP14.8 billion. Members equity totaled PhP4.25 billion. The paper calls attention to the institutional, policy and regulatory issues and challenges facing micro-insurance.micro-insurance, risk protection services, insurance industry, life insurance, mutual benefit associations, social protection, micro-finance institutions, micro-insurance delivery

Developing Principles for the Regulation of Microinsurance : Philippine Case Study

Illness or injury, death of a family member, man-made calamities and natural disasters have a devastating effect on those poor households cash flow, liquidity and earning capacities and thus, on household welfare. Demand for micro-insurance products is growing in view of continuing risks to household welfare and the seeming inability of the government to address this issue. This study seeks to provide a better understanding of the micro-insurance market in the Philippines and to draw certain principles for micro-insurance regulation from a review of the Philippine experience with micro-insurance. The study describes how policies, legal, regulatory and supervisory framework governing insurance have shaped the development of the market and vice versa. The Philippine experience on the provision of micro-insurance services and the interaction between the insurance providers and the regulator may help inform the development of certain principles for micro-insurance regulation.micro-insurance, catastrophic events, moral hazard, market conduct regulation, product regulation

Microinsurance in the Philippines: Policy and Regulatory Issues and Challenges

This study assesses the state of microinsurance in the country, identifies the players and their performance, and the challenges facing microinsurance development. The term micro pertains to the capacity of a program to handle the small, sometime irregular cash flows of poor households, who have been excluded in the commercial insurance system for a variety of reasons. Microinsurance products, specifically designed with the poor in mind, will help mitigate risks and reduce the vulnerability of poor households. The most prominent forms of microinsurance are life insurance and health insurance (carried out as part of an overall health care package that links the health insurance to a health facility), which have been designed to be responsive to the need of poor households. The paper reports 17 players in the emerging microinsurance industry, consisting of 12 cooperatives, three NGOs/MFIs, and two transport associations that are offering home-made microinsurance. These “home-made” microinsurance products continue to be provided despite their actuarial weaknesses and lack of financial capacity of the providers because of very strong demand from their membership for such financial products. Given their advantages over commercial insurance companies, the mutual benefit associations (MBAs) are the usual vehicles of microinsurance programs. In 2004, 18 MBAs were registered with the Insurance Commission (IC) with accumulated assets of PhP14.8 billion. Members equity totaled PhP4.25 billion. The paper calls attention to the institutional, policy and regulatory issues and challenges facing microinsurance.microfinance institutions, insurance industry, microinsurance, risk protection services, life insurance, mutual benefit associations, social protection, microinsurance delivery