Access to Insurance Initiative Newsletter: 08/2013

Welcome to the second issue of our monthly newsletter, where we update insurance regulators and supervisors on the work of the Initiative, inform you about events and publications, and share experiences and learning across jurisdictions.

This month, we provide an update on the recent IAIS Financial Inclusion Subcommittee meetings held in Manila, outline emerging insights from our global cross-country synthesis project and feature an input by our partner the ILO Microinsurance Innovation Facility.
Do you have anything to share? Please send us feedback, information or tips for the next issue.

- Access to Insurance Initiative Secretariat team

IAIS Manila meetings: Charting a course for market conduct, distribution and consumer protection for inclusive insurance markets

July was an important month for regulation and supervision supporting inclusive insurance markets:

1. It saw progress towards the new IAIS Issues Paper on Market Conduct, Distribution and Consumer Protection in Inclusive Insurance Markets. The Issues Paper drafting group, chaired by Mr Roy Chowdhury from the IRDA in India, met in Manila, Philippines, to compile the first draft outline for the paper and discuss the purpose and contents.
   
   Supervisors aiming to enhance access to insurance in their jurisdictions are confronted with many challenges with regard to consumer protection, distribution and market conduct. The IAIS has joined efforts to think through some of these issues, including financial education, data collection and data sharing, product design, disclosure and transparency, as well as distribution methods. All of these take on a particular character in the inclusive insurance sphere. For example: whereas traditionally insurance supervisors only had to regulate a few distribution methods, notably brokers and agents, they are now confronted with a multitude of new channels and sales representatives. How should they respond?
   
   If you would like to contribute to the development of this paper, do not hesitate to contact the IAIS or A2ii Secretariats.
    
2. The IAIS Financial Inclusion Subcommittee (FISc) took stock of the progress of the A2ii cross-country synthesis project (see below), the new strategy of the A2ii as the implementation partner of the IAIS on access, the Issues Paper, as well as a planned Application Paper on Mutuals, Cooperatives and Community-based Organizations.
   
   Takaful insurance is an increasingly relevant topic for many supervisors. In an effort to provide inputs to supervisors in this regard, FISc plans to cooperate with the Islamic Financial Services Board (FSB), an international standard-setting body to promote and enhance the soundness and stability of the Islamic financial services industry.
   
   In the next issue of The Initiative Informs, we will look at how individual jurisdictions are tackling the Takaful topic in the context of promoting inclusive insurance markets.

The next meeting of the FISc will take place on 6 September 2013 in Gibraltar as part of the IAIS Implementation Committee meetings.

A practical response to consumer protection: microinsurance dispute resolution in the Philippines

Contribution from Insurance Commissioner Emmanual Dooc

Since, 2010, the Philippines Insurance Commission, in partnership with other government agencies, has been pro-actively promoting inclusive insurance market development through the adoption of a regulatory framework for microinsurance comprising various regulations, guidance and performance standards, as well as by joining hands with industry to embark on a financial literacy campaign.

One of the recent initiatives under the regulatory framework is a framework and circular, approved in December 2012, to prescribe guidelines for the implementation of Alternative Dispute Resolution Mechanisms for Microinsurance (ADReM). The ADReM provides for a low-cost, accessible, practical, efficient and transparent mechanism for resolving disputes related to microinsurance claims. Download the framework.

Business models, risks and regulatory implications

What are the regulatory and supervisory implications of emerging microinsurance market trends and what can we learn from the way that supervisors in different jurisdictions are responding? The A2ii is conducting an exercise to synthesize insights and learning across various A2ii insurance diagnostics and other studies conducted to date. The purpose is to identify trends and issues across countries on key microinsurance policy, regulatory and supervisory topics, so that supervisors can draw on these insights in their task of regulation and supervision for inclusive insurance markets.
 
Watch this space for further updates as the project progresses. Click here for a presentation on the emerging findings and insights.

Quality at scale: a new strategy for A2ii partner ILO Microinsurance Innovation Facility

"Our vision is a world in which people manage their risks and break the cycle of poverty by getting better access to effective insurance services’’ – Craig Churchill, Team Leader, ILO’s Microinsurance Innovation Facility.

Today microinsurance covers half a billion risks, up from 135 million in 2009, with rapid growth in India, South Africa, and the Philippines. Yet millions of poor households still lack access to valuable products. Action is needed not only to reach dramatically greater scale, but also to provide high-quality products for low-income clients.

After five years, the Facility is embarking on a new and ambitious strategy. Its aim is to promote the adoption of good practices by key stakeholders, and therefore dramatically expand access to better insurance services.

The strategy involves three primary sets of activities: an innovation laboratory will test new approaches with microinsurance pioneers, capacity building will promote better microinsurance provision, and they will bring together stakeholders, including insurers, distributors, regulators, and governments, to accelerate the development of microinsurance markets in selected countries.

In this way, the Facility aims to reduce the vulnerability of more than 100 million low-income people over the next five years.

For more information click here.

In brief

Coming up

ILO-A2ii webinar on inclusive market development, 28 August 2013 at 14:30pm, CEST. Click here to register.

IAIS Implementation Committee meetings, Gibraltar 3 to 6 September

Toronto Centre leadership seminar, Manila, 16-20 September 2013. Click here for more information or to register.

Meet

Mr Mustafa Lebbar

Head of Division, Department of Insurance and Social Welfare (DAPS),
Ministry of Economy and Finance, Morocco.

Mr Lebbar is a familiar face in the global inclusive insurance supervisory arena and a close colleague of the A2ii., During the last IAIS Annual Conference and General Meeting, he was appointed chair of the Financial Inclusion Subcommittee.

He has been with the Department of Insurance and Social Welfare since 1978, where he participated in the development of national projects such as the Insurance Code and the Accounting System of Insurance.

An interesting read

An interesting read

On 19 July, the Microinsurance Network released a Draft Paper for comment titled “Pure” Intentions and Practice: Challenges and Good Practices in Consumer Protection in Microinsurance.

Comments welcome at: info@microinsurancenetwork.org

Supervisor's corner

Supervisor’s corner

Regina Simões (left)
– General-Coordinator
of Insurance Products

Maria Augusta Alves (right)
– Head of Microinsurance Division

SUSEP-Brazilian insurance supervisory authority

Brazil has been actively implementing a microinsurance regulatory regime over the past year. In June 2012, SUSEP published a set of six microinsurance circulars. At the end of 2012, two more Resolutions were issued.

SUSEP also implemented a new electronic document registration system for microinsurance products and all microinsurance plans are posted on the SUSEP website. Already, numerous microinsurance products spanning death, disability, funeral, unemployment and property insurance have been registered in this way.

The impact has been broader than just microinsurance: the regulatory innovations with regard to microinsurance – such as remote contracting and new types of intermediaries – are now also being applied to other insurance lines.

For more information visit www.susep.gov.br

Do you have an experience to share? Click here to let us know of any new microinsurance regulatory developments or lessons in your jurisdiction, or join our LinkedIn group and post discussion topics or questions.