Access to Insurance Initiative Newsletter: 07/2013

Welcome to the first issue of our monthly newsletter, where we aim to update insurance regulators and supervisors on the work of the Initiative, inform you about events and publications, and to share experiences and learning across jurisdictions. Do you have anything to share? Please send us feedback, information or tips for the next issue.

- Access to Insurance Initiative Secretariat team

Chairman remarks on new strategic direction for the Initiative

At our meeting on 21 May 2013, the Governing Board of the A2ii approved a new strategy for 2013 and beyond. This marked the end of the first phase of the Initiative’s existence, which focused on knowledge gathering and awareness creation in financial inclusion in insurance. The second phase will focus on utilising this knowledge to support supervisory capacity building.
Supervisors play an important role in encouraging private and public stakeholders to enhance access to insurance. Reforms in regulation and supervision are required for the development of inclusive insurance markets.

In this phase, the A2ii will become the implementation partner of the IAIS on access, which means that IAIS members and beyond will see an expansion of supervisory support services offered through the A2ii/ IAIS partnership. A2ii will work with the IAIS to expand on innovative capacity building tools and methods, promote peer dialogue, support learning developed by supervisors for supervisors, strengthen regional coordination, synthesize good practices and measure regulatory impact within IAIS member jurisdictions.

Some new services are mentioned in this newsletter, such as the self-assessment tool and the training module on inclusion that is currently under development. We encourage you to engage with the IAIS and A2ii to strengthen our global supervisory community on inclusion.

- Jonathan Dixon
Deputy Executive Officer: Insurance, South Africa, Chair of the Governing Board of the Access to Insurance Initiative, Chair of the IAIS Implementation Committee and the IAIS Regional Coordinator for the Sub-Saharan Africa region

Peer learning on innovative business models during A2ii Cairo seminar

On May 29 and 30, 2013, the African Insurance Organization (AIO), the A2ii, the International Labour Organization’s (ILO) Microinsurance Innovation Facility and the programme Promoting Financial Sector Dialogue in Africa: Making Finance Work for Africa (GIZ/MFW4A) for the fourth time hosted a Policy Seminar on Microinsurance Regulation for Supervisory Authorities, back to back with the 40th AIO Conference and General Assembly in Cairo, Egypt.

Increasingly, supervisors are confronted by new and innovative business models that do not fit squarely in existing regulatory and supervisory frameworks. At the seminar, more than 50 representatives from supervisory authorities in 20 African countries discussed and exchanged experiences around the regulatory and supervisory response to such models. The main question was: how to foster innovation and outreach while ensuring that responsible insurance products are offered at an affordable cost to the excluded segments of the population?

Click here for an overview of the agenda and to download presentations
Click here to share experiences on this topic from your jurisdiction.

New IAIS Issues Paper underway

In October 2012, the IAIS adopted an Application Paper on Regulation and Supervision Supporting Inclusive Insurance Markets. The adoption of this paper is a milestone on the IAIS road of engagement on financial inclusion. It provides practical guidance for regulators and supervisors about how to apply an approach proportionate to the nature, scale and complexity of the risk in the specific market context.

Following on from the Application Paper, an Issues Paper on Market Conduct, Distribution and Consumer Protection in Inclusive Insurance Markets will now be drafted.

Watch next month’s issue for an update and preliminary insights.

50 supervisors complete A2ii/IAIS self-assessments on financial inclusion

Following on the self-assessment exercise launched in response to the IAIS Application Paper on Regulation and Supervision Supporting Inclusive Insurance Markets, supervisors from 50 jurisdictions will receive an individual and confidential country report from the IAIS/A2ii assessing the supportiveness of their current policies, programs and initiatives to the cause of enhancing inclusive insurance markets.

Supervisors who participated in the assessment and receive a report can draw on the results of the exercise and the individual country report to enhance their supervisory practices and legislative frameworks.

Once jurisdictions receive their individual reports, A2ii and IAIS will have a dialogue with supervisors to discuss the results. Going forward, the self-assessment will be a strong tool to identify IAIS member supervisory support needs at a regional and national level, which can serve as basis for offering technical assistance.

In October of this year, the A2ii and IAIS will also publish an aggregate report identifying global and regional trends on financial inclusion in insurance based on the self-assessment results. For an update on progress, click here.

You can still benefit! If you have not yet participated but would like to conduct a self-assessment, click here to access the self-assessment toolkit. Access the official announcement here.

A2ii and IAIS to develop training tool on financial inclusion in insurance

The IAIS and A2ii are developing a training tool based on the Application Paper on Regulation and Supervision supporting Inclusive Insurance Markets and the Insurance Core Principles (ICPs).

The tool is primarily aimed at insurance supervisors and the training materials will be used in seminars hosted by the IAIS and its members, as well as the A2ii. It can also be used for self-learning via an online programme. The training tool will consist of a basic-level module and several advanced-level case studies that provide comprehensive training in the principal areas of financial inclusion in insurance.

We’ll keep you posted… The tool will be available online in October 2013 and will be rolled out through an online learning platform during the first quarter of 2014.

Are you interested to participate? We are organising two test seminars to validate the training module:

In Manila, Philippines, from 16-20 September 2013, integrated within the Toronto Centre leadership seminar co-organized by A2ii.
In addition, we will organize a test seminar back-to-back with the Financial Stability Institute (FSI) training seminar in Zambia, 24-27 September 2013.

Huge opportunity for insurance development in Nigeria asks for regulatory response

The Microinsurance Country Diagnostic in Nigeria, conducted by the National Insurance Commission (NAICOM), Making Finance Work for Africa (MFW4A), GIZ and the A2ii, has been released. The findings are sure to be of interest to supervisors in other jurisdictions facing similar challenges.

The diagnostic finds much scope for microinsurance expansion in Nigeria given the currently very limited reach of the retail insurance market. However, consumer awareness and trust in the sector is limited and the supply response has been slow.

On the regulatory front, it recommends the creation of a dedicated microinsurance framework that allows for a variety of organisations to offer microinsurance – traditional insurance companies as well as dedicated microinsurers. Such a regime requires strict but proportionate entry and on-going requirements in line with the recommendations set forth in the Application Paper on Regulation and Supervision Supporting Inclusive Insurance Markets .

Proposed elements include:

lower minimum capital balanced by a limited scope of permitted activities
an effective and streamlined licensing and supervision process

Click here to download the Microinsurance Country Diagnostic in Nigeria.

Click here for a blog about the study findings.

Click here to take a look at the stakeholder workshop presentation.

In brief

Recent events

From 24-25 June 2013, the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Federal Financial Supervisory Authority (BaFin) hosted the fourth Responsible Finance Forum in Berlin on consumer protection in emerging insurance markets. It was attended by representatives of supervisory authorities, industry and development organisations.

Click here for the press release.

Coming up

Toronto Centre leadership seminar, Manila, 16-20 September 2013. More information to follow in the next issue.

Financial Stability Institute training seminar, Livingstone, Zambia, 24-27 September 2013. More information to follow in the next issue.

Meet...

Marike Komen Brady, acting A2ii Executive Director. Marike joined the Initiative in January 2013 as IAIS project manager and became the acting Executive Director in April 2013. Marike is a lawyer by training and worked at the Netherlands Central Bank on international policy issues, working closely with the IAIS. Marike also represented the global interests of the U.S. life insurance industry at the American Council of Life Insurers. Finally, she served as deputy head of the Press, Communications and Cultural affairs office at the Dutch Embassy in Washington DC. As a lawyer specialized in international human rights, Marike is pleased to work on issues that can have an impact on someone’s life.

An interesting read

An interesting read…

Our featured publication of the month is the Landscape of Microinsurance in Africa 2012. It was recently released by Making Finance Work for Africa (MFW4A) and the Munich Re Foundation, supported by the African Development Bank, ILO’s Microinsurance Innovation Facility and the Microinsurance Network.
It provides a comprehensive update of the state of the microinsurance market in Africa – estimated to now be 44 million clients strong, a 200% increase since 2008. Yet, with 38 million of the insured concentrated in Eastern and Southern Africa and with South Africa alone accounting for 60% of coverage, there are still huge untapped opportunities.

Supervisor's corner

Supervisor’s corner

What is new in microinsurance regulation in Pakistan? Update by Faraz Uddin Amjad, Joint Director for Policy, Regulation and Development in the Insurance Division of the Securities & Exchange Commission of Pakistan:

“Following the country diagnostic report on the state of microinsurance in Pakistan published in October 2012, the Securities and Exchange Commission of Pakistan (SECP) formed a private sector-led working group to finalise and recommend the regulatory framework for microinsurance. The working group has broad representation from the association of insurers as well as microfinance providers, national poverty alleviation fund, technology providers and donors. The draft regulatory framework developed by the working group focuses primarily on contract and disclosure requirements, product features, intermediation, claims handling process, grievance handling and information sharing. The nub of the framework lies in the themes of consumer protection and the code of conduct for microinsurance agents. It is aimed at catalysing scale: Pakistan is currently a market of more than 4 million microinsurance policyholders and it is anticipated that the new regulatory framework will foster the market to grow at the next level, potentially reaching an estimated 31 million people.”

For more detail, download the presentation Mr Amjad made to the IAIS-MIN Joint Working Group Meeting in Bonn in April 2013.

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.