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Regulation and supervision of microinsurance
International Association of Insurance Supervisors (IAIS) and the Consultative
Group for Assisting the Poor (CGAP) has released on 1st June 2007, a paper entitled Issues in regulation and
supervision of microinsurance, prepared by the IAIS-CGAP Joint Working Group.
Regulators and supervisors in emerging market jurisdictions realise that a more conducive
and enabling regulatory environment creates an “inclusive” insurance market that works
effectively for the upper as well as the lower income segments, with the latter being the focus
of “microinsurance”.
Microinsurance is insurance that is accessed by the low-income
population, provided by a variety of different entities, but run in accordance with generally
accepted insurance practices. Importantly, this means that the risk insured under a
microinsurance policy is managed based on insurance principles and funded by premiums.
The paper outlines salient features of regulation and supervision of
microinsurance and provides input for high-level expert discussion among regulators,
supervisors and other stakeholders involved in the provision of insurance services for lowerincome
segments. It recognises that the IAIS Insurance Core Principles are the foundation of
all insurance supervision, including microinsurance.
Mashudu Munyai, Chair of the IAIS-CGAP Joint Working Group on Microinsurance,
remarked that the Group’s work is “strongly aligned to the common goal of servicing and
providing effective access to financial services to our constituents, in a manner that is useful
and inclusive”. He continued, “A closer examination and analysis of different unique aspects
of microinsurance and a continuous dialogue with supervisors will assist in determining the
key principles in its regulation and supervision.”
Brigitte Klein, Chair of Regulation, Supervision and Policy, CGAP Working Group on
Microinsurance, commented that “inclusiveness covers both the need to have markets
accessible to those that microinsurance can serve, as well as providing them with the benefit
of prudential oversight.”
(This is the press release of BIS Press)
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