key issues in the licensing, supervision and regulation of microinsurance and mutuals (by am best,...

Andrea E. KeenanVice President – Research & Ratings Criteria

Key Issues in the Licensing, Supervision and Regulation of Microinsurance and

Mutuals

September 20, 2013A.M. Best - Oldwick, NJ

ICMIF-AOA Development Network Seminar


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September 20, 2013

Agenda

1. Insurance Regulation Standard Objectives

2. Current Global Climate for Insurance Regulators

3. The Fit of Microinsurance (and Mutuals) into This Framework

September 20, 2013ICMIF-AOA Development Network Seminar

Regulators and Microinsurance

• Regulators have two major objectives:

1. Ensure the protection of policyholders.

2. Provide access to insurance to the population.






1. Microinsurance and Policyholder Protection• Providers of insurance in a domicile must be

regulated for the protection of their customers.• But, regulations are often too high-cost to be within

the business plan of a viable microinsurer.






2. Microinsurance and Access to Insurance• Microinsurance is an attractive solution to regulators

who are focused on risk protection reaching the less wealthy populations.

• But, regulations are often too high-cost to be within the business plan of a viable microinsurer.


Agenda





Global Regulatory Framework

Standard Setting Bodies

G-20

IMF

International CurrencyFX Stability

Emergency Funds

FSAPs

World Bank

Economic DevelopmentPoverty Reduction

Microinsurance

Financial Stability Board (FSB)

Devises, coordinates and monitors implementation of global financial

regulations

BCBS

FASB

IOSCO IAIS


G-20

• The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established in 1999.– Financial crises of late 1990s.

• Predecessors:– G-7– G-22– G-33

• Common theme: reduce the world economy's susceptibility to crises.


G-20

• 2012 Mexico Presidency– “Financial inclusion is a key

component in the development of healthy, vibrant and stable financial systems contributing to sustainable economic growth.”

• 2013 Russia Presidency– Build off of 2012 theme with a

focus on financial literacy and access to financial services by women, migrants and the youth.


Global Regulatory Framework


G-20

IMF


Emergency Funds

FSAPs

World Bank


Microinsurance



regulations

BCBS

FASB

IOSCO IAIS


Global Regulatory Framework: IMF & World Bank

• International Monetary Fund– Financial Stability

Assessment Program

• World Bank– Educational assistance– Financial Assistance– Microinsurance Initiatives

and Technical Expertise


G-20

IMF


Emergency Funds

FSAPs

World Bank


Microinsurance



regulations

BCBS

FASB

IOSCO IAIS


Global Regulatory Framework: IAIS

• Established in 1994.• Sets standards “Insurance Core

Principles.”

• IAIS’s G20 Mandate– Systemic Risk and Group

Regulation – Financial Inclusion


G-20

IMF


Emergency Funds

FSAPs

World Bank


Microinsurance



regulations

BCBS

FASB

IOSCO IAIS


International Association of Insurance Supervisors (IAIS)

• IAIS and Financial Inclusion– Joint Working Group (JWG) on Microinsurance

• 2012 established Financial Inclusion Subcommittee– Current / Recent Microinsurance Work

• Application Paper on Regulation and Supervision Supporting Inclusive Insurance Markets Concluded October 2012

• Issues Paper on Market Conduct, Distribution and Consumer Protection in Inclusive Insurance Markets Draft Paper 2013

– Application Paper on Mutuals, Cooperatives and Community-Based Organizations Drafting begun July 2013


Agenda





Microinsurance a Natural Fit


Making Micro Possible


IAIS Issues Paper 2013

• Making Insurance Approachable and Accessible to the Targeted Groups– Financial Literacy– Product Design and Policy Language

• Creating Client Value– Claims Settlement and Payments– Complaints Handling

• Sustainable Industry– Performance of Insurers


Conclusions

• State of Global Regulation Currently is Accommodating for Development of Financial Inclusion– Encourages Global Attention on Innovations in

Microinsurance– Mutual and Cooperative Organizations Have an

Important Role to Play• Global Community Benefits from Communication of

Country-Level Experiences


Andrea E. KeenanVice President – Research & Ratings Criteria

Thank You


September 20, 2013A.M. Best - Oldwick, NJ

key issues in the licensing, supervision and regulation of microinsurance and mutuals (by am best,...

Economy & Finance

insurance microinsurance

microinsurance regulators

regulation of microinsurance

fit of microinsurance

insurance policies

risk protection

credit risk

major objectives