WWW.BOOK.DISLIB.INFO
FREE ELECTRONIC LIBRARY - Books, dissertations, abstract
 
<< HOME
CONTACTS



Pages:     | 1 |   ...   | 86 | 87 || 89 | 90 |   ...   | 108 |

«Protecting the poor A microinsurance compendium Edited by Craig Churchill Protecting the poor A microinsurance compendium Protecting the poor A ...»

-- [ Page 88 ] --

3.3 Philippines In the Philippines, the insurance supervisor has created a two-tier system, similar to the tiered regulatory environments that have emerged for microfinance. To create a life insurance company under the first tier, it takes Php 50 million (about US$1 million) and for non-life Php 100 million (US$2 million).19 The Insurance Commission (IC) of the Philippines plans to increase the minimum capital requirement for all new insurance players.

The second tier comprises mutual benefit associations (MBA), an institutional form created by the IC under the ambit of the insurance law. Although most MBAs are small and unregistered, once they become significant enough to be “noticed” in terms of volumes and membership numbers, they need to be registered, i.e. licensed by the Commissioner.

18 The Financial Sector Charter (2003) in South Africa was originally conceived as a transformational blueprint for the financial services industry, i.e. de-racializing the financial sector in terms of its – hitherto predominantly white – ownership, employment and procurement practices; however, it also includes very specific targets for an improvement in financial access. Signatories of the Charter include government, industry bodies and representatives of labour and civil society. In specific terms, banks and insurers have committed to provide certain products and services to lower-income people by 2008.

19 US$1 = 52.87 Php (Philippine Peso) 504 The role of other stakeholders According to the Mutual Benefit Associations Act,20 such associations are subject to supervision and need to have access to an actuary. An MBA must deposit US$182 as initial capital and continue to contribute to a guarantee fund at least 10 per cent of its assets, up to the minimum capital required for a fully fledged insurance company. MBA licensing and supervision provides some protection for members since the supervision reduces the scheme’s vulnerability to fraud and mismanagement. The IC has established a special MBA unit to supervise them.21 Nonetheless, in practice, it does not aggressively challenge non-registered MBAs due to its limited supervisory capacity, which raises doubts as to the degree of consumer protection under the current arrangements. Agents of MBAs do not require licences.

One problem with this arrangement is the high income-tax differences between commercial insurance companies and these second-tier institutions, which can be a deterrent to conversion into a first-tier entity. For example, CARD MBA, which provided life insurance to more than 600,000 poor Filipinos in 2004, originally planned to become a fully fledged insurance company. This plan has not progressed, however, due to the high tax burden on insurance companies, even though CARD MBA would have a number of interesting business opportunities as a first-tier insurer.

Although this tax issue is not directly in the realm of insurance supervisors, they are in a position to provide relevant input and convey it to the policymakers. In the present situation, when governments in many countries are looking to promote alternative market-based mechanisms to provide protection for the lives, health and assets of their population, policymakers may find merit in such proposals.

Some MBAs are registered as such to take advantage of more favourable tax conditions (regulatory arbitrage) and some MBAs are not in the best of financial health, possibly due to mismanagement, among other reasons. In recognition of these problems, the IC plans to adjust the MBA regulation in the near future.

4 Conclusions

The starting point for creating inclusive insurance markets is for supervisors to have a mandate to do so. If insurance supervisors are to comply with this mandate and take their market development responsibilities seriously, they need instructions from policymakers to the effect that this is indeed a priority. Such instructions make sense, given the role of insurance in achieving the 20 Chapter VII of the Insurance Act (Sections 390–409).

21 In 2001, 18 out of the 32 licensed MBAs (56 per cent) were inspected on-site.

An enabling regulatory environment for microinsurance 505 Millennium Development Goals (see Chapter 1.1) and the limited resources available for publicly-sponsored social protection benefits (see Chapter 1.3).

The major challenge for supervisors is to create an enabling environment for outreach and sustainability of the growing microinsurance market. From the policyholder’s perspective, supervisors need to guarantee that the increasing number of semi- or informal microinsurance schemes fulfil their obligations to their members. The protection of poor people’s scarce funds is a critical concern.

It is quite difficult to provide this consumer protection while at the same time encouraging innovative solutions to respond to the insurance needs of low-income households. Adjustments to regulatory frameworks are often perceived as being in conflict with prudential principles and risk creating distortions in the market place. Therefore, supervisors have to find a balance that promotes inclusion – which means extending insurance to the huge lowincome market while protecting their investments and confidence – without putting an undue burden on supervisors. This is not an easy task.

Since high capital requirements are inappropriate for small microinsurance policies, one solution which needs to be further explored is the riskbased capital (RBC) approach. RBC represents an amount of capital that a company should hold to protect customers against adverse developments based on an assessment of risks. It is typically calculated by applying factors to accounting aggregates that represent various risks to which a company is exposed. Risk-based supervision has become recognized as an international standard, endorsed by the IAIS and the developed market supervisors.





Each jurisdiction has its specific features and there is no one solution that fits all. This is illustrated in the examples from India, South Africa and the Philippines, where each country has adopted a different approach. India compels insurers to serve the poor and has made some critical regulatory adjustments by reforming its broker/agent regulation, which may be the easiest way to stimulate the increased provision of microinsurance. South Africa, on its way to a new framework for microinsurance, is cautiously approaching its enormous informal insurance industry. The supervisor wants to extend consumer protection to those who have informal insurance, but does not want to regulate the schemes out of existence. The solution found in the Philippines is to build on the strength of mutual schemes. The model of the guarantee fund, tied to volumes and not requiring much initial capital, is an appropriate mechanism for providing consumer protection for these second-tier providers.

The revision of agent and broker licensing requirements could be the fastest and easiest way of stimulating increased provision of insurance services, while the creation of a new tier of institutions might be a major step forThe role of other stakeholders ward, but could require some time and effort. In addition, the emergence of third-party administrators could be important, since microinsurance is a high-volume, low-margin business that requires considerable administrative expertise. It is also useful to consider alternative distribution channels; retailers and cell phone companies – any organization that engages in financial transactions with the low-income market – could distribute microinsurance.

There should be a coherent, principles-based regulatory framework to take into account the different institutional requirements for microinsurance.

Such a framework does not necessarily mean a separate law for microinsurance, as in the case of India. It could also comprise amendments to the insurance act, as in the Philippines. Rather than shoehorning all insurers into one common set of regulations, this framework approach requires differentiated rules and regulations for different provider models. In other words, special institutional options for microinsurance are likely to be more effective in enhancing the inclusiveness of the insurance industry than the standard regulation with a single tier.

Microinsurance promotion implies that policymakers and supervisors take concrete steps, while understanding that incorporating microinsurance schemes into the regulated sphere imposes costs on supervisors as well as on the microinsurers, which may have to be passed on to the policyholders. In addition, one has to look critically at the threat that the formalization of informal schemes may result in a loss of social orientation.22 Good supervision requires insurance-specific technical competence. It is certainly not appropriate to delegate responsibility to other government authorities. In the same line, the capacity of insurance supervisors is a serious consideration. It is unrealistic to promote adjustments to the regulatory environment that will result in an increase in regulated insurers, some of which will need different supervisory approaches, without building up the capacity and resources of insurance supervisors.

A critical question is how to react to small schemes that are not (yet) able to adopt the commercial orientation required for a formalized institution. It is important to define a threshold where formalization is required and where regulation needs to be imposed (Genesis Analytics, 2005). Microinsurance operations up to this threshold would then be exempted from supervision.

However, once the threshold is crossed, such entities need to be formally licensed.

22 In microfinance, the data show that the correlation between formalization and mission drift is much weaker than suspected, and was never considered to be a serious problem. This might be partly related to the fact that finding “real commercial” owners was, in most cases, not an urgent necessity for the transforming MFIs due to the many development-oriented investors available.

An enabling regulatory environment for microinsurance 507 An intermediate step for smaller microinsurance providers that are too large to operate outside the regulatory radar, but still too weak to apply for a licence for fully fledged insurers, could be self-regulation (market-conduct standards) organized by an apex body. Self-regulation may help the industry to some extent, but can never free insurance supervisors from their responsibilities. This approach would only be feasible in countries with a significant number of providers (Genesis Analytics, 2005).

Microinsurance straddles the boundary between government-provided social protection and market interventions. Consequently, intensive stakeholder dialogue is required to ensure compatibility and cohesiveness of both private and public policies. For example, an insight into the pricing mechanism of insurance schemes subsidized by governments could provide a benchmark showing how such schemes would have worked in the absence of subsidy. In addition, it also provides evidence on the merits of public-private partnerships for ensuring better servicing, lowering costs and subsidies and directing subsidies to the most vulnerable segment of the population. Clear rules need to be defined in terms of accounting and solvency norms to segregate government-subsidized products in an insurer’s portfolio.

Finally, for regulatory adaptations to work, there needs to be a significant investment in education at many levels. Policymakers and supervisors have to understand the risks and potential of microinsurance, and therefore knowhow transfer and dialogue are primary concerns. Donors and other promoters are also learning and have to be prepared to finance and technically assist supervisors as well as microinsurance providers. Finally, the customers who demand microinsurance services are not well-educated; governments and donors have to assume a role in this area. These challenges have to be dealt with alongside the regulatory and supervision aspects.

5.3 The promotional role of governments Sabine Trommershäuser, Roland Lindenthal and Rüdiger Krech The authors appreciate the thoughtful and useful feedback on this chapter provided by Christian Jacquier (ILO), Jeremy Leach (FinMark Trust) and Gabriele Ramm (consultant).

Protection against risks is a citizen’s right. Therefore, it is a responsibility of the state to use all possible means to deliver this public good and to create an environment in which equitable access to social protection systems is promoted (ILO, 2002c).



Pages:     | 1 |   ...   | 86 | 87 || 89 | 90 |   ...   | 108 |


Similar works:

«Service Description Hard Drive Data Recovery Service Service Overview Dell is pleased to provide Hard Drive Data Recovery (the “Service” or “Services”) for select products (the “Supported Products” as defined below) in accordance with this Service Description. Entitled Customers may request that the failed hard disk drive (“HDD”) be sent for Hard Drive Data Recovery during the term of this agreement as indicated on the Customer’s Dell invoice. This service includes: •...»

«Agronomy Research 8 (Special Issue III), 625–632, 2010 Use of genetic resources from Jerusalem artichoke collection of N. Vavilov Institute in breeding for bioenergy and health security S. Kiru1 and I. Nasenko2 N. Vavilov Institute of Plant Industry (VIR), B. Morskaya St. 44, 190000 St. Petersburg, Russian Federation; e-mail: s.kiru@vir.nw.ru Majkop research station of N. Vavilov Institute of Plant Industry, Shuntuk, Majkop distr. Krasnodar reg., Russian Federation Abstract. The VIR...»

«  Presse-Information DGPPN Kongress 27. – 30. November 2013 Pressekonferenz Donnerstag, 28.11.2013 // 12.00 – 13.00 Uhr // ICC, Raum 42 „Amoklauf – was steckt dahinter?“ Moderation: Dr. Thomas Kunczik, Wiehl Referenten:  Prof. Dr. med. Thomas E. Schläpfer, Bonn Leiter des DGPPN-Referats „Experimentelle Stimulationsverfahren in der Psychiatrie, Stellvertretender Direktor der Klinik und Poliklinik für Psychiatrie und Psychotherapie, Universitätsklinikum Bonn  Gisela Mayer,...»

«Vrijgegeven kopie van een speciale druk uit „Der Merkurstab“, Heft 2/1993 Abschrift: Sonderdruck aus „Der Merkurstab“, Heft 2/1993 Das Öldispersionsbad nach Werner Junge Indikationsliste Hermfried Kunze Das Jungebad wurde von Franziska und Werner Junge 1937 entwickelt in dem sie die Angaben Rudolf Steiners über Ölbäder in seinem Vortragszyklus „Geisteswissenschaft und Medizin“ verwerteten und zu diesem Zwecke ihr Öldispersionsgerät entwickelten, das unter der Bezeichnung...»

«Bibliografische Informationen der Deutschen Bibliothek Die Deutsche Bibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; Detaillierte bibliografische Daten sind im Internet über http://dnb.ddb.de abrufbar.2. veränderte Auflage 2010 © 2010 by Verlag: Deutsche Veterinärmedizinische Gesellschaft Service GmbH, Gießen Printed in Germany ISBN 978-3-941703-87-2 Verlag: DVG Service GmbH Friedrichstraße 17 35392 Gießen 0641/24466 geschaeftsstelle@dvg.net www.dvg.net...»

«Asbestos background information This document provides a range of background information about asbestos to help those unfamiliar with the topic to engage with the policy proposals for new regulations covering work involving asbestos. These proposals are contained in chapter 4 of the Developing regulations to support the new Health and Safety at Work Act discussion document. What is asbestos? The term “asbestos” is used for a group of naturally occurring minerals that take the form of long...»

«Aus der Abteilung für Zahnerhaltungskunde und Parodontologie des CharitéCentrums für Zahn-, Mundund Kieferheilkunde der Medizinischen Fakultät Charité – Universitätsmedizin Berlin DISSERTATION Einfluss der Konditionierung mit verschiedenen Säuregelen auf die Penetration eines Adhäsivs in natürliche Zahnschmelzkaries in vitro zur Erlangung des akademischen Grades Doctor medicinae dentariae (Dr. med. dent.) vorgelegt der Medizinischen Fakultät Charité – Universitätsmedizin Berlin...»

«Raising and escalating concerns Guidance for nurses and midwives We are the nursing and midwifery regulator for England, Wales, Scotland, Northern Ireland and the Islands.• We exist to safeguard the health and wellbeing of the public.• We set the standards of education, training and conduct that nurses and midwives need to deliver high quality healthcare consistently throughout their careers.• We ensure that nurses and midwives keep their skills and knowledge up to date and uphold the...»

«DRAFT-NOT FOR CIRCULATION Fetal Protection Laws: Moral Panic & The New Constitutional Battlefront Michele Goodwin† INTRODUCTION I. IMPLEMENTATION OF STATE LAW: THE SHIFTING ROLE OF MEDICAL PERSONNEL IN FETAL PROTECTION LAW CASES.13 A. Reliance on Medical Personnel to Interpret State Statutes 1. Florida 2. Iowa B. Formidable Discretionary Power II. CRIMINAL LEVERAGE, MEDICAL UTILITY, AND THE FIDUCIARY RELATIONSHIP A. Wrong Calls & Corruption of the Physician-Patient Relationship 1. Disparate...»

«HeartWare® Ventricular Assist System Patient Manual CAUTION: Federal law restricts this device to sale by or on the order of a physician. IMPORTANT Please read this entire manual before using the HeartWare® Ventricular Assist System outside of the hospital. It is not safe to use the system away from trained professionals until you understand the information in this manual.CONTACT INFORMATION All problems should be promptly reported to medical or technical personnel. Before you leave the...»





 
<<  HOME   |    CONTACTS
2016 www.book.dislib.info - Free e-library - Books, dissertations, abstract

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.