Business World
Finance
Posted on 08:56 PM, December 28, 2010
THE NUMBER of active microfinance clients in the Philippines increased between 2006 and 2008 following the implementation of a project by the Asian Development Bank (ADB), a report released yesterday by the multilateral lending agency showed.
THE ASIAN DEVELOPMENT BANK released a report yesterday indicating that the number of microfinance clients in the Philippines increased between 2006 to 2008. Microfinance is considered one of the tools that help combat poverty.
THE ASIAN DEVELOPMENT BANK released a report yesterday indicating that the number of microfinance clients in the Philippines increased between 2006 to 2008. Microfinance is considered one of the tools that help combat poverty.
The ADB reported that microfinance clients increased by 129.17% to 5.5 million in December 2008, from 2.4 million in December 2006.
ADB said its $150-million Microfinance Development Program (MDP), approved on Nov. 22, 2005, helped create a “sound and market-oriented microfinance sector development path” for the Philippines.
The project had the goal of helping the Philippine government in addressing weaknesses in the microfinance sector and help poor Filipinos access quality financial services.“The objective of the MDP was to improve household incomes, reduce poverty and reduce the vulnerability of the poor,” ADB said in the report.
Microfinance is the provision of financial services to low-income clients who traditionally lack access to typical banking and related services.
Microfinance is also the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services.
The National Credit Council, under the Finance department, served as the borrower and executing agency for the loan.
Aside from increasing the number of Filipinos who access microfinance services, the bank said MDP also helped in creating a total of 2.6 million jobs during the period of its implementation, along with the increase in the amount of microfinance and in the number of loan releases.
The ADB report added that performance standards of microfinance institutions in terms of portfolio quality, efficiency, sustainability outreach ratings and continued monitoring were also achieved, along with easy financial transactions through electronic banking and appropriate rural saving schemes that increased the clients’ savings mobilization.
“The MDP enhanced the enabling and regulatory environment as the Bangko Sentral ng Pilipinas formulated rules and regulations to promote microfinance operations by banks, allowing microfinance-oriented banks to open branches anywhere in the country, and promoting electronic banking with consumer protection, particularly for savings mobilization,” ADB said.
It added that the Securities and Exchange Commission managed to comply with the program’s required policy action of compelling microfinance-oriented non-government organizations to be transparent and observe full disclosure in their operations.
Assessing the MDP overall, the multilateral financial institution said it was “successful” in achieving its objectives with its high efficiency and likely sustainability.
Finance officials were not immediately available for comment as of yesterday. -- Jo Javan A. Cerda
Wednesday, December 29, 2010
Friday, November 12, 2010
Asia: Big scope for microinsurance in several countries
Asia Insurance Review Vol I Issue 184
The Philippines, Indonesia and India offer the biggest market opportunities for microinsurance because of their regulatory frameworks, strong cooperative systems and potential risks from extreme weather and disasters such as earthquakes and volcano eruptions, reports Reuters citing Mr Craig Churchill, head of the global Microinsurance Network and team leader of the International Labour Office's Microinsurance Innovation Facility.
He was speaking in conjunction with the three-day 6th International Microinsurance Conference in Manila that began on Tuesday. Around 500 participants are attending the event to discuss the solutions and challenges in microinsurance. The conference is organised by the Munich Re Foundation, Microinsurance Network, the Philippines' Department of Finance, and Georgia State University's Center for the Economic Analysis of Risk.
At present, over 140 million people, mostly in Africa and Asia, are covered by affordable insurance premiums, and studies showed the potential market is up to 3 billion, says the Munich Re Foundation and International Labour Organisation. More than half of microinsurance products are focused on life and health, while less than 10% cover farms.
"We're still at the experimental stage in offering products that could cover agriculture," said Mr Churchill, adding that there is huge potential growth for such products, citing the impact of typhoons Ketsana and Parma in the northern Philippines in late 2009.
Last month, German reinsurer Munich Re said that it would launch a reinsurance project in the Philippines to cover cooperative companies against extreme weather events. That will be the first microinsurance product in the country to offer farmers some protection against typhoons and flooding problems, to which the Philippines is prone.
Mr Joselito S Almario, a director of the Department of Finance, said that microinsurance has a potential Philippine market of nearly 35 million people willing to pay a premium of PHP20-30 (US$0.46-0.69) a week for coverage of up to PHP120,000 (US$2,771) in life and non-life benefits. At present, 14% of the Philippines' 96 million people have insurance, including 2.9 million people covered by microinsurance, mostly as members of cooperatives.
The Philippines, Indonesia and India offer the biggest market opportunities for microinsurance because of their regulatory frameworks, strong cooperative systems and potential risks from extreme weather and disasters such as earthquakes and volcano eruptions, reports Reuters citing Mr Craig Churchill, head of the global Microinsurance Network and team leader of the International Labour Office's Microinsurance Innovation Facility.
He was speaking in conjunction with the three-day 6th International Microinsurance Conference in Manila that began on Tuesday. Around 500 participants are attending the event to discuss the solutions and challenges in microinsurance. The conference is organised by the Munich Re Foundation, Microinsurance Network, the Philippines' Department of Finance, and Georgia State University's Center for the Economic Analysis of Risk.
At present, over 140 million people, mostly in Africa and Asia, are covered by affordable insurance premiums, and studies showed the potential market is up to 3 billion, says the Munich Re Foundation and International Labour Organisation. More than half of microinsurance products are focused on life and health, while less than 10% cover farms.
"We're still at the experimental stage in offering products that could cover agriculture," said Mr Churchill, adding that there is huge potential growth for such products, citing the impact of typhoons Ketsana and Parma in the northern Philippines in late 2009.
Last month, German reinsurer Munich Re said that it would launch a reinsurance project in the Philippines to cover cooperative companies against extreme weather events. That will be the first microinsurance product in the country to offer farmers some protection against typhoons and flooding problems, to which the Philippines is prone.
Mr Joselito S Almario, a director of the Department of Finance, said that microinsurance has a potential Philippine market of nearly 35 million people willing to pay a premium of PHP20-30 (US$0.46-0.69) a week for coverage of up to PHP120,000 (US$2,771) in life and non-life benefits. At present, 14% of the Philippines' 96 million people have insurance, including 2.9 million people covered by microinsurance, mostly as members of cooperatives.
Micro-insurance regulatory framework set
BusinessWorld, Finance
Posted on 02:04 PM, November 10, 2010
Breaking News ( Updated as of 01:54 PM )
A REGULATORY framework for micro-insurance companies will be implemented in January, officials said on the second day of the sixth International Micro-insurance Conference in Makati City.
"The performance standards [regulations] will take in effect by January 2011," said Vida T. Chiong, Insurance Commission deputy commissioner and officer-in-charge.
"This will serve as a guide for the commission and other stakeholders to determine the viability of a [micro-insurance] company -- if it has the capacity to settle claims in the future," she added.
Ms. Chiong said the standards will provide "regulatory space" to micro-insurers with "lower" requirements for putting up a micro-insurance compared to those stipulated in the Insurance Code.
Geraldine Desiderio-Garcia, chairman of the micro-insurance committee of the Philippine Life Insurers Association, said in a lecture at the conference the standards will "formalize existing micro-insurance practices" such as cutting by half the P100-million capital requirement -- the fund to put up a micro-insurance firm -- for commercial insurers.
The standards, currently undergoing fine-tuning by a technical working group composed of government officials and private representatives, will be transmitted next month to a micro-insurance steering committee, headed by Finance Undersecretary Gil S. Beltran,, for review.
The Insurance Commission will give final approval of standards. -- Prinz P. Magtulis
Posted on 02:04 PM, November 10, 2010
Breaking News ( Updated as of 01:54 PM )
A REGULATORY framework for micro-insurance companies will be implemented in January, officials said on the second day of the sixth International Micro-insurance Conference in Makati City.
"The performance standards [regulations] will take in effect by January 2011," said Vida T. Chiong, Insurance Commission deputy commissioner and officer-in-charge.
"This will serve as a guide for the commission and other stakeholders to determine the viability of a [micro-insurance] company -- if it has the capacity to settle claims in the future," she added.
Ms. Chiong said the standards will provide "regulatory space" to micro-insurers with "lower" requirements for putting up a micro-insurance compared to those stipulated in the Insurance Code.
Geraldine Desiderio-Garcia, chairman of the micro-insurance committee of the Philippine Life Insurers Association, said in a lecture at the conference the standards will "formalize existing micro-insurance practices" such as cutting by half the P100-million capital requirement -- the fund to put up a micro-insurance firm -- for commercial insurers.
The standards, currently undergoing fine-tuning by a technical working group composed of government officials and private representatives, will be transmitted next month to a micro-insurance steering committee, headed by Finance Undersecretary Gil S. Beltran,, for review.
The Insurance Commission will give final approval of standards. -- Prinz P. Magtulis
Insurance standards readied
Insurance standards readied
BusinessWorld
Finance
Posted on 08:38 PM, November 10, 2010
REGULATORS are preparing “performance standards” for microinsurance providers to make sure their operations are sustainable and the poor, who are their clients, are protected.
At the same time, they are planning a nationwide financial literacy campaign to increase awareness among the poor about the importance of microinsurance.
Vida T. Chiong, deputy commissioner and officer-in-charge of the Insurance Commission (IC), shared with participants of the 6th International Microinsurance Conference in Makati City yesterday that the performance standards shall serve as a “guide for the commission... to determine... the capacity [of a microinsurer] to settle claims in the future.”
The standards go by the acronym “SEGURO,” for Stability, Efficiency, Governance, Understanding of the product, Risk Management and Outreach.
Microinsurance providers -- which include commercial insurers, cooperative insurance societies and mutual benefit associations -- will be evaluated based on their solvency and level of risk-based capital, among others.
Their performance, in terms of time they take to pay out claims, number of claims they reject, growth in number of clients and growth in premiums, will also be examined.
The standards are currently being fine-tuned by a technical working group composed of the IC, National Credit Council, Securities and Exchange Commission, Philippine Life Insurance Association, Inc. and the Philippine Insurers and Reinsurers Association.
These will be transmitted next month to a steering committee, headed by Finance Undersecretary Gil S. Beltran for review.
The IC will give final approval to the standards.
The plan is to have the standards in place by January 2011 and for microinsurance providers to report to the IC how they performed against the standards by 2012.
“The Insurance Commission shall use the performance standards to identify as early as possible those entities whose financial condition is a concern and recomend appropriate remedial measures, if necessary,” a draft IC circular states.
Meanwhile, Joselito A. Almario, a director at the Finance department, said a microinsurance literacy campaign is planned to start by January.
“It will run from January to June. We will go region to region to educate stakeholders, especially the poor, about microinsurance,” he said.
Modules will be provided during the regional campaign, Mr. Almario said, with stakeholders such as regulators, insurance firms, clients, and even legislators expected to learn “what they can contribute to boost the microinsurance industry in the country.” -- Prinz P. Magtulis
BusinessWorld
Finance
Posted on 08:38 PM, November 10, 2010
REGULATORS are preparing “performance standards” for microinsurance providers to make sure their operations are sustainable and the poor, who are their clients, are protected.
At the same time, they are planning a nationwide financial literacy campaign to increase awareness among the poor about the importance of microinsurance.
Vida T. Chiong, deputy commissioner and officer-in-charge of the Insurance Commission (IC), shared with participants of the 6th International Microinsurance Conference in Makati City yesterday that the performance standards shall serve as a “guide for the commission... to determine... the capacity [of a microinsurer] to settle claims in the future.”
The standards go by the acronym “SEGURO,” for Stability, Efficiency, Governance, Understanding of the product, Risk Management and Outreach.
Microinsurance providers -- which include commercial insurers, cooperative insurance societies and mutual benefit associations -- will be evaluated based on their solvency and level of risk-based capital, among others.
Their performance, in terms of time they take to pay out claims, number of claims they reject, growth in number of clients and growth in premiums, will also be examined.
The standards are currently being fine-tuned by a technical working group composed of the IC, National Credit Council, Securities and Exchange Commission, Philippine Life Insurance Association, Inc. and the Philippine Insurers and Reinsurers Association.
These will be transmitted next month to a steering committee, headed by Finance Undersecretary Gil S. Beltran for review.
The IC will give final approval to the standards.
The plan is to have the standards in place by January 2011 and for microinsurance providers to report to the IC how they performed against the standards by 2012.
“The Insurance Commission shall use the performance standards to identify as early as possible those entities whose financial condition is a concern and recomend appropriate remedial measures, if necessary,” a draft IC circular states.
Meanwhile, Joselito A. Almario, a director at the Finance department, said a microinsurance literacy campaign is planned to start by January.
“It will run from January to June. We will go region to region to educate stakeholders, especially the poor, about microinsurance,” he said.
Modules will be provided during the regional campaign, Mr. Almario said, with stakeholders such as regulators, insurance firms, clients, and even legislators expected to learn “what they can contribute to boost the microinsurance industry in the country.” -- Prinz P. Magtulis
Microinsurance sees growth opportunities in Asia
Reuters - Wednesday, November 10
MANILA, Nov 9 - India, Indonesia and the Philippines offer the biggest
opportunities for the fledging microinsurance industry, which has a potential market of 3 billion people, industry officials said on Tuesday.
Microinsurance offers coverage for people with low incomes, including products such as life insurance, and is branching into areas such as offering farmers polices against extreme weather.
Over 140 million people, mostly in Africa and Asia, are now covered by affordable insurance premiums, and studies showed the potential market is up to 3 billion, the Munich Re Foundation and International Labour Organisation said ahead of a three-day microinsurance conference in Manila.
Craig Churchill, head of the global Microinsurance Network, said more than half of microinsurance products were focused on life and health while less than 10 percent cover farms.
"We're still at the experimental stage in offering products that could cover agriculture," he said, adding there was huge potential growth for such products, citing impacts of typhoons Ketsana and Parma in the northern Philippines in late 2009.
Those typhoons, and Typhoon Megi in October, caused deaths, flooding, landslides, and damage to crops and infrastructure.
Last month, German reinsurer Munich Re said it would launch a reinsurance project in the Philippines to cover co-operative companies against extreme weather events. [ID:nLDE69A1DM]
That will be the first microinsurance product in the country to offer farmers some protection against perennial typhoon and flooding problems. Another three groups offer non-life products.
Churchill said the Philippines, Indonesia and India offer the biggest market opportunities due to their regulatory frameworks, strong co-operative system and potential risks from extreme weather and disasters such as earthquake and volcanoes.
About 14 percent of the Philippines' 96 million people have insurance, including 2.9 million people covered by microinsurance, mostly as members of co-operatives,
Joselito Almario of the Finance Department said.
He said microinsurance had a potential Philippine market of nearly 35 million people willing to pay a premium of 20-30 pesos a week for coverage of up to 120,000 pesos in life and non-life benefits.
"It costs them just a pack of cigarettes a day," said Almario, who is also deputy executive director of the national credit council.
The government has set a maximum daily premium of 20 pesos, 5 percent of the daily minimum wage in Metro Manila, for life and health insurance products offering payouts of up to 200,000 pesos for more than a dozen insurers, including rural banks and co-operatives
MANILA, Nov 9 - India, Indonesia and the Philippines offer the biggest
opportunities for the fledging microinsurance industry, which has a potential market of 3 billion people, industry officials said on Tuesday.
Microinsurance offers coverage for people with low incomes, including products such as life insurance, and is branching into areas such as offering farmers polices against extreme weather.
Over 140 million people, mostly in Africa and Asia, are now covered by affordable insurance premiums, and studies showed the potential market is up to 3 billion, the Munich Re Foundation and International Labour Organisation said ahead of a three-day microinsurance conference in Manila.
Craig Churchill, head of the global Microinsurance Network, said more than half of microinsurance products were focused on life and health while less than 10 percent cover farms.
"We're still at the experimental stage in offering products that could cover agriculture," he said, adding there was huge potential growth for such products, citing impacts of typhoons Ketsana and Parma in the northern Philippines in late 2009.
Those typhoons, and Typhoon Megi in October, caused deaths, flooding, landslides, and damage to crops and infrastructure.
Last month, German reinsurer Munich Re
That will be the first microinsurance product in the country to offer farmers some protection against perennial typhoon and flooding problems. Another three groups offer non-life products.
Churchill said the Philippines, Indonesia and India offer the biggest market opportunities due to their regulatory frameworks, strong co-operative system and potential risks from extreme weather and disasters such as earthquake and volcanoes.
About 14 percent of the Philippines' 96 million people have insurance, including 2.9 million people covered by microinsurance, mostly as members of co-operatives,
Joselito Almario of the Finance Department said.
He said microinsurance had a potential Philippine market of nearly 35 million people willing to pay a premium of 20-30 pesos a week for coverage of up to 120,000 pesos in life and non-life benefits.
"It costs them just a pack of cigarettes a day," said Almario, who is also deputy executive director of the national credit council.
The government has set a maximum daily premium of 20 pesos, 5 percent of the daily minimum wage in Metro Manila, for life and health insurance products offering payouts of up to 200,000 pesos for more than a dozen insurers, including rural banks and co-operatives
Microinsurance conference today
Monday, 08 November 2010 00:00
Written by Gold Star Daily
SOME of the world's most prominent and ardent advocates of microinsurance are set to convene today as part of a global effort to extend risk cover for the poor and help popularize the practice of financial inclusion in the Philippines where the less financially endowed are often shut out of financial services available to everyone else.
Germany's Munich Re Foundation announced the three-day Manila conference earlier in Munich, Germany and in Luxemburg to boost awareness of the event in a country where fewer than one in seven Filipinos even know what an insurance policy is and what it can do to one's life.
The 6th International Microinsurance Conference will convene at the Hotel Intercontinental in Makati City where some 500 participants from all corners of the world will discuss issues and offer solutions to the challenges facing microinsurance at present. Finance Secretary Cesar V. Purisima was expected to attend the opening of the conference.
Purisima acknowledged the key role microinsurance will play in the lives of Filipinos in the coming years and that with the full implementation of the government's public-private partnership program or PPP. "Microinsurance will be at the forefront of the Philippine government's efforts to provide our low-income sector and the poor protection from risks, providing them the means to rebuild their lives when unfortunate and unforeseen events occur," he said.
The government previously bared plans to improve the country's low insurance penetration rate where only an estimated 13.92 percent of some 90 million Filipinos have insurance cover. Local insurers under the Philippine Insurers and Reinsurers, for example, vowed to help raise awareness about the benefits of insurance cover among Filipinos. pna
A version of this article appeared in print on Nov 9, 2010 Tuesday
Written by Gold Star Daily
SOME of the world's most prominent and ardent advocates of microinsurance are set to convene today as part of a global effort to extend risk cover for the poor and help popularize the practice of financial inclusion in the Philippines where the less financially endowed are often shut out of financial services available to everyone else.
Germany's Munich Re Foundation announced the three-day Manila conference earlier in Munich, Germany and in Luxemburg to boost awareness of the event in a country where fewer than one in seven Filipinos even know what an insurance policy is and what it can do to one's life.
The 6th International Microinsurance Conference will convene at the Hotel Intercontinental in Makati City where some 500 participants from all corners of the world will discuss issues and offer solutions to the challenges facing microinsurance at present. Finance Secretary Cesar V. Purisima was expected to attend the opening of the conference.
Purisima acknowledged the key role microinsurance will play in the lives of Filipinos in the coming years and that with the full implementation of the government's public-private partnership program or PPP. "Microinsurance will be at the forefront of the Philippine government's efforts to provide our low-income sector and the poor protection from risks, providing them the means to rebuild their lives when unfortunate and unforeseen events occur," he said.
The government previously bared plans to improve the country's low insurance penetration rate where only an estimated 13.92 percent of some 90 million Filipinos have insurance cover. Local insurers under the Philippine Insurers and Reinsurers, for example, vowed to help raise awareness about the benefits of insurance cover among Filipinos. pna
A version of this article appeared in print on Nov 9, 2010 Tuesday
Thursday, November 11, 2010
Insurance standards readied
Business World
Finance
Posted on 08:38 PM, November 10, 2010
REGULATORS are preparing “performance standards” for microinsurance providers to make sure their operations are sustainable and the poor, who are their clients, are protected.
At the same time, they are planning a nationwide financial literacy campaign to increase awareness among the poor about the importance of microinsurance.
Vida T. Chiong, deputy commissioner and officer-in-charge of the Insurance Commission (IC), shared with participants of the 6th International Microinsurance Conference in Makati City yesterday that the performance standards shall serve as a “guide for the commission... to determine... the capacity [of a microinsurer] to settle claims in the future.”
The standards go by the acronym “SEGURO,” for Stability, Efficiency, Governance, Understanding of the product, Risk Management and Outreach.
Microinsurance providers -- which include commercial insurers, cooperative insurance societies and mutual benefit associations -- will be evaluated based on their solvency and level of risk-based capital, among others.
Their performance, in terms of time they take to pay out claims, number of claims they reject, growth in number of clients and growth in premiums, will also be examined.
The standards are currently being fine-tuned by a technical working group composed of the IC, National Credit Council, Securities and Exchange Commission, Philippine Life Insurance Association, Inc. and the Philippine Insurers and Reinsurers Association.
These will be transmitted next month to a steering committee, headed by Finance Undersecretary Gil S. Beltran for review.
The IC will give final approval to the standards.
The plan is to have the standards in place by January 2011 and for microinsurance providers to report to the IC how they performed against the standards by 2012.
“The Insurance Commission shall use the performance standards to identify as early as possible those entities whose financial condition is a concern and recomend appropriate remedial measures, if necessary,” a draft IC circular states.
Meanwhile, Joselito A. Almario, a director at the Finance department, said a microinsurance literacy campaign is planned to start by January.
“It will run from January to June. We will go region to region to educate stakeholders, especially the poor, about microinsurance,” he said.
Modules will be provided during the regional campaign, Mr. Almario said, with stakeholders such as regulators, insurance firms, clients, and even legislators expected to learn “what they can contribute to boost the microinsurance industry in the country.” -- Prinz P. Magtulis
Finance
Posted on 08:38 PM, November 10, 2010
REGULATORS are preparing “performance standards” for microinsurance providers to make sure their operations are sustainable and the poor, who are their clients, are protected.
At the same time, they are planning a nationwide financial literacy campaign to increase awareness among the poor about the importance of microinsurance.
Vida T. Chiong, deputy commissioner and officer-in-charge of the Insurance Commission (IC), shared with participants of the 6th International Microinsurance Conference in Makati City yesterday that the performance standards shall serve as a “guide for the commission... to determine... the capacity [of a microinsurer] to settle claims in the future.”
The standards go by the acronym “SEGURO,” for Stability, Efficiency, Governance, Understanding of the product, Risk Management and Outreach.
Microinsurance providers -- which include commercial insurers, cooperative insurance societies and mutual benefit associations -- will be evaluated based on their solvency and level of risk-based capital, among others.
Their performance, in terms of time they take to pay out claims, number of claims they reject, growth in number of clients and growth in premiums, will also be examined.
The standards are currently being fine-tuned by a technical working group composed of the IC, National Credit Council, Securities and Exchange Commission, Philippine Life Insurance Association, Inc. and the Philippine Insurers and Reinsurers Association.
These will be transmitted next month to a steering committee, headed by Finance Undersecretary Gil S. Beltran for review.
The IC will give final approval to the standards.
The plan is to have the standards in place by January 2011 and for microinsurance providers to report to the IC how they performed against the standards by 2012.
“The Insurance Commission shall use the performance standards to identify as early as possible those entities whose financial condition is a concern and recomend appropriate remedial measures, if necessary,” a draft IC circular states.
Meanwhile, Joselito A. Almario, a director at the Finance department, said a microinsurance literacy campaign is planned to start by January.
“It will run from January to June. We will go region to region to educate stakeholders, especially the poor, about microinsurance,” he said.
Modules will be provided during the regional campaign, Mr. Almario said, with stakeholders such as regulators, insurance firms, clients, and even legislators expected to learn “what they can contribute to boost the microinsurance industry in the country.” -- Prinz P. Magtulis
Monday, November 8, 2010
‘Three-in-one’ microinsurance product planned
Today’s Headlines
BusinessWorld
Posted on 10:22 PM, November 07, 2010
BY JUDY T. GULANE, Sub-Editor
REGULATORS want to introduce a "three-in-one" product to the fledgling microinsurance market, capitalizing on the Filipinos’ penchant for cheap, convenient products and to boost protection for the poor.
Tropical storm Ondoy’s damage is cited as spurring the development of the proposed ‘Buhay, Bahay at Kabuhayan’ microinsurance product. -- AFP
Tropical storm Ondoy’s damage is cited as spurring the development of the proposed ‘Buhay, Bahay at Kabuhayan’ microinsurance product. -- AFP
They are still at the stage of finalizing the product, for now dubbed "Buhay, Bahay at Kabuhayan," but already have inquired if they can start developing and marketing it.
"It’s a simple yet powerful product," said Joselito S. Almario, a director at the Finance department and deputy executive director of the National Credit Council, which the Finance department heads.
The product is designed to give P10,000 coverage against death from accident or damage to property/business from natural calamities. One may buy three units for a total coverage of P30,000. A contract is good for a year.
"It’s a composite, a three-in-one," said Mr. Almario, adding that no insurer at home or abroad is known for selling this bundle.
"If something happens to you, an accident and you die, then your beneficiaries get P10,000," he explained. "If your home or business or place of business gets damaged by flood or an earthquake, then you get P10,000."
Regulators, he said, are constantly seeking ways to provide social nets for the poor -- the slowest to recover after personal or natural calamities -- without burdening them with high premiums.
The technical group that is working on "Buhay, Bahay at Kabuhayan" still has to compute the final premiums but these shall hew to guidelines set in Insurance Memorandum Circular 1-2010 that state premiums on a daily basis must not exceed 5% of the daily minimum wage of nonagricultural workers in Metro Manila, which is currently at P404 daily.
The Philippine microinsurance industry is still in its infancy, with the National Strategy and the Regulatory Framework for Microinsurance released only in January 2010.
Yet it is fast-developing. After the IC came out with Insurance Memorandum Circular 1-2010 that defined microinsurance, the agency issued, together with the Securities and Exchange Commission and Cooperative Development Authority, another circular closing down informal insurance or insurance-like activities.
The Bangko Sentral ng Pilipinas also came out with a circular allowing rural, cooperative and thrift banks to market and sell microinsurance products within their premises.
Commercial insurers, mutual benefit associations and cooperatives are now selling microinsurance products, but in singles, not "three-in-one" as contemplated in "Buhay, Bahay at Kabuhayan."
Considered a pioneer in the field of microinsurance, the Philippines will share its experiences during the 6th Microinsurance International Conference that takes place starting tomorrow to Thursday.
Manila is this year’s host of the annual gathering.
Mario C. Valdez, general manager of the Philippine Insurers and Reinsurers Association (PIRA) that groups the country’s 80-plus non-life insurers, claimed that "several" PIRA members expressed interest in the product after it was unveiled during an October 11 association conference.
"Buhay, Bahay at Kabuhayan" will be considered a non-life product.
"They were enthusiastic about it. They said they want to develop it, as it suits their clients’ needs," Mr. Valdez said.
There is demand for this product, he claimed, with many victims of tropical storm Ondoy, which ravaged Luzon last year, regretting not having insurance against calamities.
"With this product, we hope to help the poor get back on their feet," Mr. Valdez said.
"It’s also a way for non-life insurers to expand their market," he added.
"Right now, they are competing for a small market, and the IC will require they have a P125-million capitalization by December. Microinsurance opens up a new market and provides a venue for them to make returns on their additional capitalization," Mr. Valdez said.
The technical working group, headed by the Finance department, targets to launch the final "Buhay, Bahay at Kabuhayan" policy contract before yearend.
Other members of the technical working group are the IC, PIRA, National Credit Council, Philippine Life Insurance Association, Inc. and the Actuarial Society of the Philippines.
The group enjoys technical assistance from the GTZ or German Technical Cooperation.
BusinessWorld
Posted on 10:22 PM, November 07, 2010
BY JUDY T. GULANE, Sub-Editor
REGULATORS want to introduce a "three-in-one" product to the fledgling microinsurance market, capitalizing on the Filipinos’ penchant for cheap, convenient products and to boost protection for the poor.
Tropical storm Ondoy’s damage is cited as spurring the development of the proposed ‘Buhay, Bahay at Kabuhayan’ microinsurance product. -- AFP
Tropical storm Ondoy’s damage is cited as spurring the development of the proposed ‘Buhay, Bahay at Kabuhayan’ microinsurance product. -- AFP
They are still at the stage of finalizing the product, for now dubbed "Buhay, Bahay at Kabuhayan," but already have inquired if they can start developing and marketing it.
"It’s a simple yet powerful product," said Joselito S. Almario, a director at the Finance department and deputy executive director of the National Credit Council, which the Finance department heads.
The product is designed to give P10,000 coverage against death from accident or damage to property/business from natural calamities. One may buy three units for a total coverage of P30,000. A contract is good for a year.
"It’s a composite, a three-in-one," said Mr. Almario, adding that no insurer at home or abroad is known for selling this bundle.
"If something happens to you, an accident and you die, then your beneficiaries get P10,000," he explained. "If your home or business or place of business gets damaged by flood or an earthquake, then you get P10,000."
Regulators, he said, are constantly seeking ways to provide social nets for the poor -- the slowest to recover after personal or natural calamities -- without burdening them with high premiums.
The technical group that is working on "Buhay, Bahay at Kabuhayan" still has to compute the final premiums but these shall hew to guidelines set in Insurance Memorandum Circular 1-2010 that state premiums on a daily basis must not exceed 5% of the daily minimum wage of nonagricultural workers in Metro Manila, which is currently at P404 daily.
The Philippine microinsurance industry is still in its infancy, with the National Strategy and the Regulatory Framework for Microinsurance released only in January 2010.
Yet it is fast-developing. After the IC came out with Insurance Memorandum Circular 1-2010 that defined microinsurance, the agency issued, together with the Securities and Exchange Commission and Cooperative Development Authority, another circular closing down informal insurance or insurance-like activities.
The Bangko Sentral ng Pilipinas also came out with a circular allowing rural, cooperative and thrift banks to market and sell microinsurance products within their premises.
Commercial insurers, mutual benefit associations and cooperatives are now selling microinsurance products, but in singles, not "three-in-one" as contemplated in "Buhay, Bahay at Kabuhayan."
Considered a pioneer in the field of microinsurance, the Philippines will share its experiences during the 6th Microinsurance International Conference that takes place starting tomorrow to Thursday.
Manila is this year’s host of the annual gathering.
Mario C. Valdez, general manager of the Philippine Insurers and Reinsurers Association (PIRA) that groups the country’s 80-plus non-life insurers, claimed that "several" PIRA members expressed interest in the product after it was unveiled during an October 11 association conference.
"Buhay, Bahay at Kabuhayan" will be considered a non-life product.
"They were enthusiastic about it. They said they want to develop it, as it suits their clients’ needs," Mr. Valdez said.
There is demand for this product, he claimed, with many victims of tropical storm Ondoy, which ravaged Luzon last year, regretting not having insurance against calamities.
"With this product, we hope to help the poor get back on their feet," Mr. Valdez said.
"It’s also a way for non-life insurers to expand their market," he added.
"Right now, they are competing for a small market, and the IC will require they have a P125-million capitalization by December. Microinsurance opens up a new market and provides a venue for them to make returns on their additional capitalization," Mr. Valdez said.
The technical working group, headed by the Finance department, targets to launch the final "Buhay, Bahay at Kabuhayan" policy contract before yearend.
Other members of the technical working group are the IC, PIRA, National Credit Council, Philippine Life Insurance Association, Inc. and the Actuarial Society of the Philippines.
The group enjoys technical assistance from the GTZ or German Technical Cooperation.
Tuesday, November 2, 2010
Gov’t pushing wider life insurance coverage
By Ronnel Domingo
Philippine Daily Inquirer
First Posted 21:50:00 11/01/2010
Filed Under: Insurance, Government
MANILA, Philippines—The government is now pushing efforts to expand life insurance coverage among the people.
At present, only 13.9 percent of the country’s population have insurance coverage—a disparity the government hopes to address by promoting micro-insurance as well as policies that offer low-priced premiums.
To boost this campaign, the Philippines will host the 6th International Micro-insurance Conference to be held in Manila on Nov. 9 to 11.
Over 500 delegates from around the world are expected to take part in the proceedings, said Dirk Reinhard, chairman of the conference steering committee.
According to Reinhard, most delegates recognize the importance of providing insurance services for low-income populations which, in turn, will enable a country to attain the United Nation’s Millennium Development Goals.
In a statement, Reinhard said the conference would focus on key issues, such as new distribution channels, claims-handling mechanisms, strategies for enabling the environment to develop micro-insurance, solutions for natural disasters, and insurance literacy.
“Of the many challenges the sector faces, insurance literacy is currently recognized as one of the most important hurdles to overcome,” he said. “Educating the clients on the benefits of insurance is an indispensable ingredient to the success of any micro-insurance program.”
According to Munich Re Foundation, the Germany-based organizer of the meeting, micro-insurance in the Philippines has been on the rise compared with the rest of world over the last few years.
However, Munich Re said that life insurance penetration rate in the country “is still very low.”
Even then, the group noted efforts to improve the figures, including the government’s adoption of a national strategy and regulatory framework for micro-insurance.
This policy “promotes greater access by the poor to small, affordable micro-insurance products and requires the formalization of all informal schemes of micro-insurance by 2012 to ensure that clients are adequately protected,” Munich Re said.
“The Philippine Insurers and Reinsurers Association recently pledged to inform some 27 million Filipinos on the merits of securing insurance policies in support of the government’s literacy campaign,” it added.
Philippine Daily Inquirer
First Posted 21:50:00 11/01/2010
Filed Under: Insurance, Government
MANILA, Philippines—The government is now pushing efforts to expand life insurance coverage among the people.
At present, only 13.9 percent of the country’s population have insurance coverage—a disparity the government hopes to address by promoting micro-insurance as well as policies that offer low-priced premiums.
To boost this campaign, the Philippines will host the 6th International Micro-insurance Conference to be held in Manila on Nov. 9 to 11.
Over 500 delegates from around the world are expected to take part in the proceedings, said Dirk Reinhard, chairman of the conference steering committee.
According to Reinhard, most delegates recognize the importance of providing insurance services for low-income populations which, in turn, will enable a country to attain the United Nation’s Millennium Development Goals.
In a statement, Reinhard said the conference would focus on key issues, such as new distribution channels, claims-handling mechanisms, strategies for enabling the environment to develop micro-insurance, solutions for natural disasters, and insurance literacy.
“Of the many challenges the sector faces, insurance literacy is currently recognized as one of the most important hurdles to overcome,” he said. “Educating the clients on the benefits of insurance is an indispensable ingredient to the success of any micro-insurance program.”
According to Munich Re Foundation, the Germany-based organizer of the meeting, micro-insurance in the Philippines has been on the rise compared with the rest of world over the last few years.
However, Munich Re said that life insurance penetration rate in the country “is still very low.”
Even then, the group noted efforts to improve the figures, including the government’s adoption of a national strategy and regulatory framework for micro-insurance.
This policy “promotes greater access by the poor to small, affordable micro-insurance products and requires the formalization of all informal schemes of micro-insurance by 2012 to ensure that clients are adequately protected,” Munich Re said.
“The Philippine Insurers and Reinsurers Association recently pledged to inform some 27 million Filipinos on the merits of securing insurance policies in support of the government’s literacy campaign,” it added.
Sunday, October 31, 2010
RP places second in global study on microfinance business environment
By Iris C. Gonzales (The Philippine Star) Updated October 30, 2010 12:00 AM Comments (0)
MANILA, Philippines - The Philippines placed second in a study conducted by the Economic Intelligence Unit dubbed as Global Microscope on microfinance business environment.
The study was conducted among 54 developing countries. Among the different developing countries, Peru retained its position as the global leader on microfinance bureau’s environment.
According to the study, for the second year now, the Philippines and Bolivia top the Economic Intelligence Unit’s Global Microscope index. “The Philippines and Bolivia swapped positions and finished second and third, respectively, this year. Two newcomers, Pakistan and Kenya, joined the top 10, displacing Nicaragua and Uganda,” the study noted.
The three best-performing countries score especially well in two of the main index categories: regulatory framework and institutional development.
“The Philippines enjoys the best overall regulatory environment for microfinance, alongside Cambodia, which does not make the top 10 overall, and Pakistan which does,” it said.
The study noted key changes in the country’s microfinance environment. It noted that microfinance institutions in the Philippines or MFIs are able to offer a variety of services, and many do.
“Regulated MFIs can accept deposits, and those linked to the international payments system can accept remittances,” it said.
In terms of choices, clients in the Philippines have a wide choice of service providers, including local and national institutions.
Furthermore, the study noted that in 2010, the Bangko Sentral ng Pilipinas (BSP) began allowing rural, co-operative, and thrift banks to sell authorized micro-insurance products.
These institutions can be licensed as micro-insurance agents, and can only sell policies up to P190,000 or $4,000 under certain provisions, it noted.
The study also took note of the fact that in April 2010 the BSP issued a circular that set the rules for accrediting microfinance rating agencies, a move seen as encouraging local MFIs to be rated.
“Until recently, it was rare for microfinance banks (MFBs), rural banks, or thrift banks with microfinance operations to become externally rated,” the study said.
In 2010, BSP issued rules on the extension of housing microfinance and eased requirements for micro-lending in agriculture which the study said also contributed to the improvement in the microfinance environment.
At the same time, the study underscored the need to put in place a credit information system.
“The Credit Information System Act signed into law in September 2008 requires all regulated entities to submit positive and negative information to a new credit bureau under the Securities and Exchange Commission (SEC). However, the establishment of the Central Credit Information Corporation (CCIC) has not yet resulted in the operation of a functioning, active credit bureau, despite the fact that implementing rules and regulations (IRR) were approved in May 2009. According to local press, operations are now expected to begin in the third quarter of 2010,” it said
MANILA, Philippines - The Philippines placed second in a study conducted by the Economic Intelligence Unit dubbed as Global Microscope on microfinance business environment.
The study was conducted among 54 developing countries. Among the different developing countries, Peru retained its position as the global leader on microfinance bureau’s environment.
According to the study, for the second year now, the Philippines and Bolivia top the Economic Intelligence Unit’s Global Microscope index. “The Philippines and Bolivia swapped positions and finished second and third, respectively, this year. Two newcomers, Pakistan and Kenya, joined the top 10, displacing Nicaragua and Uganda,” the study noted.
The three best-performing countries score especially well in two of the main index categories: regulatory framework and institutional development.
“The Philippines enjoys the best overall regulatory environment for microfinance, alongside Cambodia, which does not make the top 10 overall, and Pakistan which does,” it said.
The study noted key changes in the country’s microfinance environment. It noted that microfinance institutions in the Philippines or MFIs are able to offer a variety of services, and many do.
“Regulated MFIs can accept deposits, and those linked to the international payments system can accept remittances,” it said.
In terms of choices, clients in the Philippines have a wide choice of service providers, including local and national institutions.
Furthermore, the study noted that in 2010, the Bangko Sentral ng Pilipinas (BSP) began allowing rural, co-operative, and thrift banks to sell authorized micro-insurance products.
These institutions can be licensed as micro-insurance agents, and can only sell policies up to P190,000 or $4,000 under certain provisions, it noted.
The study also took note of the fact that in April 2010 the BSP issued a circular that set the rules for accrediting microfinance rating agencies, a move seen as encouraging local MFIs to be rated.
“Until recently, it was rare for microfinance banks (MFBs), rural banks, or thrift banks with microfinance operations to become externally rated,” the study said.
In 2010, BSP issued rules on the extension of housing microfinance and eased requirements for micro-lending in agriculture which the study said also contributed to the improvement in the microfinance environment.
At the same time, the study underscored the need to put in place a credit information system.
“The Credit Information System Act signed into law in September 2008 requires all regulated entities to submit positive and negative information to a new credit bureau under the Securities and Exchange Commission (SEC). However, the establishment of the Central Credit Information Corporation (CCIC) has not yet resulted in the operation of a functioning, active credit bureau, despite the fact that implementing rules and regulations (IRR) were approved in May 2009. According to local press, operations are now expected to begin in the third quarter of 2010,” it said
Thursday, October 28, 2010
6th International Microinsurance Conference - Manila, the Philippines
Munich/Luxembourg – With the growing recognition that providing insurance services for the low-income populations plays a significant role in the achieving the United Nation’s Millennium Development Goals (MGDs), the 6th International Microinsurance Conference will take place this year in Manila, the Philippines. The conference, which will run between 9 – 11 November 2010, will host around 500 participants to discuss the solutions and challenges microinsurance faces in helping to achieve these goals.
The conference, which is organised by the Munich Re Foundation and the Microinsurance Network with support from GTZ/BMZ, the Department of Finance in the Philippines and Georgia State University’s Center for the Economic Analysis of Risk, will bring together representatives from across the microinsurance sector including insurance and reinsurance companies, international organisations, NGOs, development-aid agencies, academics, policymakers, regulators and supervisors.
Secretary of Finance Cesar V. Purisima, is expected to attend the opening of the conference confirming that microinsurance is of great importance to the government of the Philippines. The Secretary affirmed that, “through a strong public-private sector collaboration, microinsurance will be in the forefront of the Philippine Government’s efforts to provide our low-income sector and the poor protection from risks, providing them the means to rebuild their lives when unfortunate and unforeseen events occur.”
The agenda for the conference was put together following a call for proposals in March 2010 by a panel of renown experts and representatives from all corners of the microinsurance world. The focus will be on independent case studies and academic research on innovative and sustainable microinsurance programmes and/or products, focusing on key issues and challenges. These include new distribution channels, claims handling mechanisms, strategies for enabling the environment to develop microinsurance, solutions for natural disasters and finally insurance literacy.
Of the many challenges the sector faces, insurance literacy is currently recognised as one of the most important hurdles to overcome. Educating the clients on the benefits of insurance is an indispensible ingredient to the success of any microinsurance programme and with the publication of a number of recent case studies, most notably a landscape study by the Insurance Education Working Group of the Microinsurance Network; good practices are emerging slowly, some of which will be presented during the conference.
The 6th International Microinsurance Conference, the longest running and most attended microinsurance conference there is, offers an indispensible added value to all those that attend and to the sector as a whole. From the first conference in Munich in 2005 through to the fifth one in Dakar (2009), which was the largest microinsurance conference ever with an attendance of over 450 representatives from 63 countries, the International Microinsurance Conference continues to provide a unique opportunity for attendees to move the sector forward though collaboration and communication.
The 6th International Microinsurance Conference in Manila, as Dirk Reinhard, Munich Re Foundation and Chairman of the Conference Steering Committee, points out “has taken on even more importance with the G20’s Financial Inclusion Experts Group (FIEG) identifying insurance as one of the fundamental financial services that requires extending in their nine Principles for Innovative Financial Inclusion”.
Over the last few years, microinsurance in the Philippines has been on the increase compared to the rest of world. But with a population of around 92 million and only 13.92 % have life insurance, penetration is still very low. Efforts are ongoing to change this though. The Department of Finance and the Insurance Commission recenltly formulated the National Strategy and Regulatory Framework for Microinsurance. Among others, it promotes greater access by the poor to small, affordable microinsurance products and requires the formalisation of all informal schemes of microinsurance provision by 2012 to ensure that clients are adequately protected. The Philippine Insurers and Reinsurers Association recently pledged to inform some 27 million Filipinos on the merits of securing insurance policies in support of the Government’s financial literacy campaign.
About the International Microinsurance Conference
Initiated and organised by the Munich Re Foundation in collaboration with the Microinsurance Network, the aim of the conference is to be the international platform where experts share information, knowledge and experience in microinsurance in order to overcome existing challenges.
About Munich Re Foundation
The Munich Re Foundation seeks to provide answers to overarching questions from a variety of perspectives in order to find sustainable solutions in the area of risk prevention. Questions concerning development are linked to risk management and poverty reduction.
For more information:
• Contact Dirk Reinhard/Martina Mayerhofer (info@munichre-foundation.org)
• Visit www.munichre-foundation.org
About the Microinsurance Network
The Microinsurance Network is a network of organisations involved in microinsurance. Its mission is to promote the development and proliferation of good-value insurance products for people on low-income by providing a platform for information sharing and stakeholder coordination.
For more information:
• Contact Matthew Genazzini (matthew.ada@microfinance.lu)
Visit www.microinsurancenetwork.org
The conference, which is organised by the Munich Re Foundation and the Microinsurance Network with support from GTZ/BMZ, the Department of Finance in the Philippines and Georgia State University’s Center for the Economic Analysis of Risk, will bring together representatives from across the microinsurance sector including insurance and reinsurance companies, international organisations, NGOs, development-aid agencies, academics, policymakers, regulators and supervisors.
Secretary of Finance Cesar V. Purisima, is expected to attend the opening of the conference confirming that microinsurance is of great importance to the government of the Philippines. The Secretary affirmed that, “through a strong public-private sector collaboration, microinsurance will be in the forefront of the Philippine Government’s efforts to provide our low-income sector and the poor protection from risks, providing them the means to rebuild their lives when unfortunate and unforeseen events occur.”
The agenda for the conference was put together following a call for proposals in March 2010 by a panel of renown experts and representatives from all corners of the microinsurance world. The focus will be on independent case studies and academic research on innovative and sustainable microinsurance programmes and/or products, focusing on key issues and challenges. These include new distribution channels, claims handling mechanisms, strategies for enabling the environment to develop microinsurance, solutions for natural disasters and finally insurance literacy.
Of the many challenges the sector faces, insurance literacy is currently recognised as one of the most important hurdles to overcome. Educating the clients on the benefits of insurance is an indispensible ingredient to the success of any microinsurance programme and with the publication of a number of recent case studies, most notably a landscape study by the Insurance Education Working Group of the Microinsurance Network; good practices are emerging slowly, some of which will be presented during the conference.
The 6th International Microinsurance Conference, the longest running and most attended microinsurance conference there is, offers an indispensible added value to all those that attend and to the sector as a whole. From the first conference in Munich in 2005 through to the fifth one in Dakar (2009), which was the largest microinsurance conference ever with an attendance of over 450 representatives from 63 countries, the International Microinsurance Conference continues to provide a unique opportunity for attendees to move the sector forward though collaboration and communication.
The 6th International Microinsurance Conference in Manila, as Dirk Reinhard, Munich Re Foundation and Chairman of the Conference Steering Committee, points out “has taken on even more importance with the G20’s Financial Inclusion Experts Group (FIEG) identifying insurance as one of the fundamental financial services that requires extending in their nine Principles for Innovative Financial Inclusion”.
Over the last few years, microinsurance in the Philippines has been on the increase compared to the rest of world. But with a population of around 92 million and only 13.92 % have life insurance, penetration is still very low. Efforts are ongoing to change this though. The Department of Finance and the Insurance Commission recenltly formulated the National Strategy and Regulatory Framework for Microinsurance. Among others, it promotes greater access by the poor to small, affordable microinsurance products and requires the formalisation of all informal schemes of microinsurance provision by 2012 to ensure that clients are adequately protected. The Philippine Insurers and Reinsurers Association recently pledged to inform some 27 million Filipinos on the merits of securing insurance policies in support of the Government’s financial literacy campaign.
About the International Microinsurance Conference
Initiated and organised by the Munich Re Foundation in collaboration with the Microinsurance Network, the aim of the conference is to be the international platform where experts share information, knowledge and experience in microinsurance in order to overcome existing challenges.
About Munich Re Foundation
The Munich Re Foundation seeks to provide answers to overarching questions from a variety of perspectives in order to find sustainable solutions in the area of risk prevention. Questions concerning development are linked to risk management and poverty reduction.
For more information:
• Contact Dirk Reinhard/Martina Mayerhofer (info@munichre-foundation.org)
• Visit www.munichre-foundation.org
About the Microinsurance Network
The Microinsurance Network is a network of organisations involved in microinsurance. Its mission is to promote the development and proliferation of good-value insurance products for people on low-income by providing a platform for information sharing and stakeholder coordination.
For more information:
• Contact Matthew Genazzini (matthew.ada@microfinance.lu)
Visit www.microinsurancenetwork.org
Wednesday, October 27, 2010
Insurers focus on microinsurance
(The Philippine Star) Updated October 26, 2010 12:00 AM Comments (0) View comments
MANILA, Philippines - Microinsurance will be one of the key topics of the Insurance Consciousness Week (ICW) from Oct. 26 to 30, to be co-promoted by the Philippine Insurers and Reinsurers Association (PIRA) and the Philippine Insurers Club (PIC).
PIRA chairman Michael Rellosa said microinsurance — or insurance for the poor and the marginalized — would be the main highlight of the ICW, which was declared 10 years ago by then President Joseph Estrada.
“Nature has once again reminded all us of the importance of being insured. Last year it was tropical storm Ondoy that flooded cars and houses. Now it’s typhoon Juan that devastated our farmlands. We really need to develop micro insurance to protect our poor countrymen who are exposed to various risks, including natural calamities,” Rellosa said.
He added that all over the world, insurance groups are looking at microinsurance as a tool to alleviate poverty. German reinsurance firm Munich Reinsurance Gmh (MunichRe), for one, is sponsoring the 6th International Microinsurance Conference which to be held in the Philippines next month.
The event is expected to draw at least 500 participants and over 80 speakers and facilitators from around the world. These participants include representatives from insurance and reinsurance companies, international organizations, non-government organizations (NGOs), development-aid agencies, the academe, policymakers, regulators and supervisors.
Rellosa said microinsurance is still facing various challenges in areas of distribution, claims handling and the lack of insurance literacy among the poor.
“Majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them and the ICW is one way of reaching out to them,” he said.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the ASEAN Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia. The association is also backing the Young ASEAN Managers Awards, which recognize the promising future leaders of the region
MANILA, Philippines - Microinsurance will be one of the key topics of the Insurance Consciousness Week (ICW) from Oct. 26 to 30, to be co-promoted by the Philippine Insurers and Reinsurers Association (PIRA) and the Philippine Insurers Club (PIC).
PIRA chairman Michael Rellosa said microinsurance — or insurance for the poor and the marginalized — would be the main highlight of the ICW, which was declared 10 years ago by then President Joseph Estrada.
“Nature has once again reminded all us of the importance of being insured. Last year it was tropical storm Ondoy that flooded cars and houses. Now it’s typhoon Juan that devastated our farmlands. We really need to develop micro insurance to protect our poor countrymen who are exposed to various risks, including natural calamities,” Rellosa said.
He added that all over the world, insurance groups are looking at microinsurance as a tool to alleviate poverty. German reinsurance firm Munich Reinsurance Gmh (MunichRe), for one, is sponsoring the 6th International Microinsurance Conference which to be held in the Philippines next month.
The event is expected to draw at least 500 participants and over 80 speakers and facilitators from around the world. These participants include representatives from insurance and reinsurance companies, international organizations, non-government organizations (NGOs), development-aid agencies, the academe, policymakers, regulators and supervisors.
Rellosa said microinsurance is still facing various challenges in areas of distribution, claims handling and the lack of insurance literacy among the poor.
“Majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them and the ICW is one way of reaching out to them,” he said.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the ASEAN Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia. The association is also backing the Young ASEAN Managers Awards, which recognize the promising future leaders of the region
Munich Re Launches Its First Microinsurance Product for Cooperatives in the Philippines
October 11, 2010 by Microfinance Africa
Filed under MICROFINANCE AROUND THE WORLD
Leave a Comment
By Iris Lai, Insurancenewsnet.com -
Munich Re has rolled out its first microinsurance product in the Philippines to provide protection for the lending capacity of cooperatives to low-income groups against extreme weather events.
The loan protection microinsurance product was developed for Coop Life Insurance & Mutual Services, a cooperative life insurer for local cooperatives and members in the Philippines, in partnership with Deutsche Gesellschaft fur Technische Zusammenarbeit, a German government-owned enterprise for international sustainable development projects.
Munich Re is the sole reinsurer for this microinsurance product, distributed through more than 1,800 cooperatives in the Philippines. Coop Life is the composite insurance provider for cooperatives with products offered for life, property and health protection. It is also the primary insurer for local cooperatives and offers them portfolio protection.
The product will enable low-income households in the Philippines to receive benefits through their cooperative after devastating natural events. For the cooperatives, the microinsurance plan will guarantee liquidity of the loan portfolio and will provide quick payout via Coop Life, said Munich Re in a statement.
Munich Re is also looking into development of other new microinsurance products in the Philippines, said Thomas Mahl, business development manager at Munich Re Singapore. The partnership with GTZ is important to promote social responsibility for catastrophe protection in delivering benefits to the target group, he said.
The Philippines is highly exposed to extreme weather events such as typhoons, torrential rain and subsequent floods, creating financial risks to microfinancial institutions. Typhoon Morakot was among the top 10 largest global natural catastrophe in 2009, causing 614 deaths, US$1.6 billion in economic losses and US$110 million in insured losses, according to Munich Re.
Natural disasters interrupt the cash flow of cooperatives as member borrowers often cannot repay their loans, leading to insolvency of the cooperatives. In the Philippines, the cooperatives currently lend money at a higher interest rate, creating an additional financial burden to the low-income borrower.
The microinsurance product “will help cooperatives to spread the risk, secure their liquidity and enhance their micro-lending capacity even in critical times, at the same time making loans affordable to their members,” said Mahl.
In addition to reinsurance coverage, Munich Re will offer support in satellite data monitoring and analysis. There has been a great demand for catastrophe risk protection in Asia. Mahl said the reinsurer is looking to develop this product in other countries.
As extreme weather events induced by climate changes are likely to increase, Munich Re said microinsurance instruments are expected to gain relevance for affected communities as well as insurers’ portfolio.
The partnership with cooperatives could scale up the microinsurance coverage on a group level across the county, said Mahl. Also, these cooperatives offer extensive distribution and administration supports for product penetration.
Filed under MICROFINANCE AROUND THE WORLD
Leave a Comment
By Iris Lai, Insurancenewsnet.com -
Munich Re has rolled out its first microinsurance product in the Philippines to provide protection for the lending capacity of cooperatives to low-income groups against extreme weather events.
The loan protection microinsurance product was developed for Coop Life Insurance & Mutual Services, a cooperative life insurer for local cooperatives and members in the Philippines, in partnership with Deutsche Gesellschaft fur Technische Zusammenarbeit, a German government-owned enterprise for international sustainable development projects.
Munich Re is the sole reinsurer for this microinsurance product, distributed through more than 1,800 cooperatives in the Philippines. Coop Life is the composite insurance provider for cooperatives with products offered for life, property and health protection. It is also the primary insurer for local cooperatives and offers them portfolio protection.
The product will enable low-income households in the Philippines to receive benefits through their cooperative after devastating natural events. For the cooperatives, the microinsurance plan will guarantee liquidity of the loan portfolio and will provide quick payout via Coop Life, said Munich Re in a statement.
Munich Re is also looking into development of other new microinsurance products in the Philippines, said Thomas Mahl, business development manager at Munich Re Singapore. The partnership with GTZ is important to promote social responsibility for catastrophe protection in delivering benefits to the target group, he said.
The Philippines is highly exposed to extreme weather events such as typhoons, torrential rain and subsequent floods, creating financial risks to microfinancial institutions. Typhoon Morakot was among the top 10 largest global natural catastrophe in 2009, causing 614 deaths, US$1.6 billion in economic losses and US$110 million in insured losses, according to Munich Re.
Natural disasters interrupt the cash flow of cooperatives as member borrowers often cannot repay their loans, leading to insolvency of the cooperatives. In the Philippines, the cooperatives currently lend money at a higher interest rate, creating an additional financial burden to the low-income borrower.
The microinsurance product “will help cooperatives to spread the risk, secure their liquidity and enhance their micro-lending capacity even in critical times, at the same time making loans affordable to their members,” said Mahl.
In addition to reinsurance coverage, Munich Re will offer support in satellite data monitoring and analysis. There has been a great demand for catastrophe risk protection in Asia. Mahl said the reinsurer is looking to develop this product in other countries.
As extreme weather events induced by climate changes are likely to increase, Munich Re said microinsurance instruments are expected to gain relevance for affected communities as well as insurers’ portfolio.
The partnership with cooperatives could scale up the microinsurance coverage on a group level across the county, said Mahl. Also, these cooperatives offer extensive distribution and administration supports for product penetration.
Insurers intensify call for microinsurance after ‘Juan’
Insurers intensify call for microinsurance after ‘Juan’
GMANews.TV
GMANews.TV - Monday, October 25
In the aftermath of typhoon Juan (international code: Megi) which devastated northern Luzon last week, insurers have intensified the call for farmers to buy microinsurance.
“Nature has once again reminded all us of the importance of being insured. Last year, it was typhoon Ondoy that flooded cars and houses. Now, it’s typhoon Juan that devastated farm lands," Philippine Insurers and Reinsurers Association (PIRA) chairman Michael Rellosa said this weekend.
“We really need to develop microinsurance — or insurance for the poor and marginalized — to protect our poor countrymen who are exposed to various risks, including natural calamities," Rellosa said in an interview.
He pointed out that some local insurance companies are now developing products for farmers.
An example is the crop insurance of one company that insures the capital used by the farmer in planting his field, Rellosa said.
The insurance company will indemnify the farmer for the capital he used should the area be declared under a state of calamity, he added.
Rellosa said microinsurance is still confronting several challenges in areas of distribution, claims handling, and the lack of insurance literacy among the poor. “Right now, majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them," he said.
Promoting security
Meanwhile, PIRA has partnered again with the Philippine Insurers Club (PIC) for the Insurance Consciousness Week (ICW), starting Oct. 26-30, 2010, that carries the theme “Promoting Security and Stability through Insurance Awareness."
The week will start with a thanksgiving mass at the Insurance Commission and dialogues with marginalized sectors on their perception of insurance and how the industry can appreciate insurance better, said PIC president Leticia Pagharion.
Charity works have also been lined up, she said.
The ICW will end in Davao City, with the Davao Insurers Club expounding on how people from Mindanao could appreciate insurance, Pagharion added.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the Association of Southeast Asian Nations’ (Asean) Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia, she said.
Pagharion said the association is also backing the Young Asean Managers Awards which recognize the promising future leaders of the region.
“We can therefore say that in the four weeks that will follow, all eyes of the insurance industry in the region will be focused on the Philippines. It is PIRA’s privilege to be given this opportunity," Rellosa said. — JE/VS, GMANEws.TV
GMANews.TV
GMANews.TV - Monday, October 25
In the aftermath of typhoon Juan (international code: Megi) which devastated northern Luzon last week, insurers have intensified the call for farmers to buy microinsurance.
“Nature has once again reminded all us of the importance of being insured. Last year, it was typhoon Ondoy that flooded cars and houses. Now, it’s typhoon Juan that devastated farm lands," Philippine Insurers and Reinsurers Association (PIRA) chairman Michael Rellosa said this weekend.
“We really need to develop microinsurance — or insurance for the poor and marginalized — to protect our poor countrymen who are exposed to various risks, including natural calamities," Rellosa said in an interview.
He pointed out that some local insurance companies are now developing products for farmers.
An example is the crop insurance of one company that insures the capital used by the farmer in planting his field, Rellosa said.
The insurance company will indemnify the farmer for the capital he used should the area be declared under a state of calamity, he added.
Rellosa said microinsurance is still confronting several challenges in areas of distribution, claims handling, and the lack of insurance literacy among the poor. “Right now, majority of our countrymen view insurance as an added expense when they should consider it as an investment and as a tool to manage the risks that they cannot handle. We need to educate them," he said.
Promoting security
Meanwhile, PIRA has partnered again with the Philippine Insurers Club (PIC) for the Insurance Consciousness Week (ICW), starting Oct. 26-30, 2010, that carries the theme “Promoting Security and Stability through Insurance Awareness."
The week will start with a thanksgiving mass at the Insurance Commission and dialogues with marginalized sectors on their perception of insurance and how the industry can appreciate insurance better, said PIC president Leticia Pagharion.
Charity works have also been lined up, she said.
The ICW will end in Davao City, with the Davao Insurers Club expounding on how people from Mindanao could appreciate insurance, Pagharion added.
Aside from the ICW and the Micro Insurance Conference, PIRA is also co-hosting the Association of Southeast Asian Nations’ (Asean) Insurance Council meetings of insurance regulators and industry leaders from Southeast Asia, she said.
Pagharion said the association is also backing the Young Asean Managers Awards which recognize the promising future leaders of the region.
“We can therefore say that in the four weeks that will follow, all eyes of the insurance industry in the region will be focused on the Philippines. It is PIRA’s privilege to be given this opportunity," Rellosa said. — JE/VS, GMANEws.TV
Friday, October 15, 2010
Microinsurance Momentum in the Philippines
Microinsurance Momentum in the Philippines
by Kate McKee: Friday, October 8, 2010
CGAP
When hundreds of practitioners from around the world descend on Manila next month for the annual microinsurance conference, they’ll have a chance to observe firsthand a sector on the move. Sure, right now only 13.92 % of Filipinos have life insurance and penetration (premiums to GDP) is only 1.05%. But access is growing. And recent field research shows that once it is explained to them, low-income people say they want insurance and are willing to pay 20-30 pesos (US$.45-.$60) a week for it. As insurance providers begin to target the low-income market, they are offering a range of products: whole life; accident, burial and medical benefits plans; asset protection for microentrepreneurs hit by fire, lightning, flood, typhoon or earthquakes; and weather index crop insurance.
Over a hundred practitioners gathered in Manila on Friday, October 1 for a consultation on the new “Roadmap for Financial Literacy on Microinsurance,” an action plan prepared by a Technical Working Group comprised of all the key stakeholders from government, the microfinance and cooperative sectors and the insurance industry. This work has been supported by ambitious sector-building programs of the Asian Development Bank and GTZ that aim to institutionalize industry standards, develop products and carry out a nationwide microinsurance literacy and advocacy campaign.
The Roadmap is accompanied by a new “National Strategy and Regulatory Framework for Microinsurance” that aims to promote orderly growth in the sector while protecting consumers by requiring retail sellers of insurance policies to either register a Mutual Benefit Association (MBA) or team up with a regulated insurer. The focus is strictly on sustainable insurance provided by private providers, distributed by financial institutions who are close to the poor, and paid for by low-income people who see insurance as a good value proposition (referred to as “the paying poor”). The day before, the Financial Monetary Board had authorized mini-branches to widen financial access points, with microinsurance mentioned specifically as a permissible product.
The new rules are being rolled out through these road shows along with a broad financial literacy campaign. Itoy Almario (National Credit Council – Department of Finance), who has spearheaded the Roadmap process, pointed out that it is not just clients but also regulators and those in the industry who need a different mind-set – “Insurance is not just for the rich.”
One aspect of the whole process that stands out is the integration of client protection right from the beginning. Almario was quick to remind the audience that the current problem is not just misunderstanding of insurance by poorer Filipinos, but outright mistrust. Simple, plain-language contracts and claims settlement within 10 days would be a good starting point to building more trust. Consumer protection and client rights and benefits are central messages in the campaign.
This focus mirrors similar work in other countries and at the global level. For example, CGAP is commissioning a chapter for the forthcoming new version of the Micro-insurance Compendium (the first was co-published by the International Labor Organization and the Munich Re Foundation on nascent approaches to consumer protection regulation. While we tend to fear that regulation will increase costs and price poor people out of the market, this may be a case where basic rules of the game actually build trust and hence help build the market, rather than stifling innovation. The Smart Campaign is working on guidelines that apply the core client protection principles to micro-insurance, and the MicroInsurance Network is launching a task force on how to promote transparency and fair treatment as the sector expands.
In the Philippines, it looks like the three essential ingredients of responsible finance – industry standards, access-friendly regulation, and financial capability initiatives – are coming together in the microinsurance sector.
–Kate McKee
by Kate McKee: Friday, October 8, 2010
CGAP
When hundreds of practitioners from around the world descend on Manila next month for the annual microinsurance conference, they’ll have a chance to observe firsthand a sector on the move. Sure, right now only 13.92 % of Filipinos have life insurance and penetration (premiums to GDP) is only 1.05%. But access is growing. And recent field research shows that once it is explained to them, low-income people say they want insurance and are willing to pay 20-30 pesos (US$.45-.$60) a week for it. As insurance providers begin to target the low-income market, they are offering a range of products: whole life; accident, burial and medical benefits plans; asset protection for microentrepreneurs hit by fire, lightning, flood, typhoon or earthquakes; and weather index crop insurance.
Over a hundred practitioners gathered in Manila on Friday, October 1 for a consultation on the new “Roadmap for Financial Literacy on Microinsurance,” an action plan prepared by a Technical Working Group comprised of all the key stakeholders from government, the microfinance and cooperative sectors and the insurance industry. This work has been supported by ambitious sector-building programs of the Asian Development Bank and GTZ that aim to institutionalize industry standards, develop products and carry out a nationwide microinsurance literacy and advocacy campaign.
The Roadmap is accompanied by a new “National Strategy and Regulatory Framework for Microinsurance” that aims to promote orderly growth in the sector while protecting consumers by requiring retail sellers of insurance policies to either register a Mutual Benefit Association (MBA) or team up with a regulated insurer. The focus is strictly on sustainable insurance provided by private providers, distributed by financial institutions who are close to the poor, and paid for by low-income people who see insurance as a good value proposition (referred to as “the paying poor”). The day before, the Financial Monetary Board had authorized mini-branches to widen financial access points, with microinsurance mentioned specifically as a permissible product.
The new rules are being rolled out through these road shows along with a broad financial literacy campaign. Itoy Almario (National Credit Council – Department of Finance), who has spearheaded the Roadmap process, pointed out that it is not just clients but also regulators and those in the industry who need a different mind-set – “Insurance is not just for the rich.”
One aspect of the whole process that stands out is the integration of client protection right from the beginning. Almario was quick to remind the audience that the current problem is not just misunderstanding of insurance by poorer Filipinos, but outright mistrust. Simple, plain-language contracts and claims settlement within 10 days would be a good starting point to building more trust. Consumer protection and client rights and benefits are central messages in the campaign.
This focus mirrors similar work in other countries and at the global level. For example, CGAP is commissioning a chapter for the forthcoming new version of the Micro-insurance Compendium (the first was co-published by the International Labor Organization and the Munich Re Foundation on nascent approaches to consumer protection regulation. While we tend to fear that regulation will increase costs and price poor people out of the market, this may be a case where basic rules of the game actually build trust and hence help build the market, rather than stifling innovation. The Smart Campaign is working on guidelines that apply the core client protection principles to micro-insurance, and the MicroInsurance Network is launching a task force on how to promote transparency and fair treatment as the sector expands.
In the Philippines, it looks like the three essential ingredients of responsible finance – industry standards, access-friendly regulation, and financial capability initiatives – are coming together in the microinsurance sector.
–Kate McKee
Sunday, October 3, 2010
IC, Pira to entice poor Pinoys to get insurance
Business Mirror
Written by Jun Vallecera / Reporter
Sunday, 03 October 2010 10:40
POLICY crafters, regulators and industry players vowed on Friday to enlighten poor, but enterprising Filipinos, whether rural- or urban-based, on the merits of acquiring some form of protection against financial reverses and other forms of misfortune.
The Insurance Commission (IC), the Philippine Insurers and Reinsurers Association, the various small units engaged in microinsurance, and technocrats from the Department of Finance met at the Century Park Hotel in Manila and committed to inform as many of the estimated 27 million poor Filipinos who do not have any kind of risk protection at all.
Less than 3 million of these very poor Filipinos have purchased an insurance policy against sickness, dismemberment, property loss, natural perils or even death, and all because an overwhelming number of them are uninformed, said Joselito Almario, deputy executive director of the National Credit Council.
The event formalized the pursuit of what has always been an informal approach to microinsurance and, at the same time, marked the start of a literacy campaign and road show meant to mainstream the microinsurance program.
Almario said only about half of the less than 3 million Filipinos that bought microinsurance policies obtained them from the formal insurance providers, potentially exposing them to many more risks than just the loss of a house or limb.
He would not blame the formal sources of risk protection for not coming down to where their services are sorely needed on account of the high transaction costs, actuarial difficulties and other factors the microinsurance program faces.
Nevertheless, Almario said, the government recognized the need to bring the large swathe of the unprotected population in from the cold and provide them with a measure of risk-mitigating programs like microinsurance.
This was the reason the IC issued a circular in March that laid down policies on what was up to then informal microinsurance activities.
The IC followed up with another circular that set guidelines on the treatment of funds collected from informal microinsurance activities.
Right now, Almario said, performance standards are being set and some fine-tuning is done on the risk-based regulatory framework the IC implements to suit the microinsurance business.
Industry players are also being urged to come up with innovative products so more Filipinos are encouraged to take risk protection for contingent events.
In essence, microinsurance is all about policies written costing as small as P300 a year yielding benefits as large a P200,000, Almario said.
Written by Jun Vallecera / Reporter
Sunday, 03 October 2010 10:40
POLICY crafters, regulators and industry players vowed on Friday to enlighten poor, but enterprising Filipinos, whether rural- or urban-based, on the merits of acquiring some form of protection against financial reverses and other forms of misfortune.
The Insurance Commission (IC), the Philippine Insurers and Reinsurers Association, the various small units engaged in microinsurance, and technocrats from the Department of Finance met at the Century Park Hotel in Manila and committed to inform as many of the estimated 27 million poor Filipinos who do not have any kind of risk protection at all.
Less than 3 million of these very poor Filipinos have purchased an insurance policy against sickness, dismemberment, property loss, natural perils or even death, and all because an overwhelming number of them are uninformed, said Joselito Almario, deputy executive director of the National Credit Council.
The event formalized the pursuit of what has always been an informal approach to microinsurance and, at the same time, marked the start of a literacy campaign and road show meant to mainstream the microinsurance program.
Almario said only about half of the less than 3 million Filipinos that bought microinsurance policies obtained them from the formal insurance providers, potentially exposing them to many more risks than just the loss of a house or limb.
He would not blame the formal sources of risk protection for not coming down to where their services are sorely needed on account of the high transaction costs, actuarial difficulties and other factors the microinsurance program faces.
Nevertheless, Almario said, the government recognized the need to bring the large swathe of the unprotected population in from the cold and provide them with a measure of risk-mitigating programs like microinsurance.
This was the reason the IC issued a circular in March that laid down policies on what was up to then informal microinsurance activities.
The IC followed up with another circular that set guidelines on the treatment of funds collected from informal microinsurance activities.
Right now, Almario said, performance standards are being set and some fine-tuning is done on the risk-based regulatory framework the IC implements to suit the microinsurance business.
Industry players are also being urged to come up with innovative products so more Filipinos are encouraged to take risk protection for contingent events.
In essence, microinsurance is all about policies written costing as small as P300 a year yielding benefits as large a P200,000, Almario said.
Gov’t eyes micro-insurance regulation next year
Business World
Finance
Posted on 06:36 PM, October 01, 2010
Gov’t eyes micro-insurance regulation next year
THE FINANCE Department is aiming to regulate all micro-insurance institutions by next year, with a technical working group finalizing a roadmap toward literacy in an indemnity targeting the low-income sector.
Finance Undersecretary Gil S. Beltran said the roadmap will help the government regulate micro-insurance companies, noting that there are many "fly-by-night" insurers without citing data.
"They are not exactly illegal. They are legitimate. It’s just that we have to move them all to the regulatory net," Mr. Beltran said at the sidelines of a micro-finance forum yesterday at the Century Park Hotel in Manila.
Mario C. Valdes, general manager of the Philippine Insurers and Reinsurers Association (PIRA) and member of the working group, said about 17,000 cooperatives offering insurance to their members should register with the Insurance Commission pursuant to its circular last January.
Memorandum Circular (MC) 1-2010 has laid out regulations covering micro-insurance, among them, that premiums to be paid by policy holders should not exceed 5% of the daily minimum wage in Metro Manila, and that insurance coverage should not be more than 500 times of it.
At current rates, micro-insurers should not charged policy holders more than P20 a day with coverage not exceeding P200,000 a year.
"We are targeting that by next year, all companies [offering micro-insurance] and their agents should be registered with the Insurance Commission," Mr. Valdes said by phone.
To do this, information dissemination about micro-insurance is ongoing nationwide. This is being facilitated by the working group composed of representatives from the Finance department-National Credit Council (NCC), Insurance Commission, Securities and Exchange Commission, and the National Anti-Poverty Commission, PIRA and other insurance associations, among others.
In the forum on Friday, NCC Executive Director Joselito S. Almario also said the working group would also distribute modules by the second quarter of next year to "increase knowledge" of different sectors such as the local government units and "potential clients" about micro-insurance.
"The problem is that companies offering micro-insurance do not know how to go down to the level of the informal sector, while informal sector is not even familiar about micro-insurance," Mr. Almario said in a separate interview.
He noted micro-insurance "had long been offered by insurance companies" only that the term was only coined by the government last January.
Michael F. Rellosa, president of the Fortune General Insurance Corp., cited an example. He said his company has been offering for five years now a one-time travel insurance, wherein policy holders who would travel in the future may pay only P50 for a coverage worth P100,000.
"If for example you would go to Baguio, you can avail yourself of this travel insurance. Para siyang tinge na insurance," Mr. Rellosa said in a separate interview.
Under MC 1-2010, micro-insurance is defined as "an activity providing specific insurance [and] insurance-like... products and services that meet the needs of the low-income sector for risk protection... and other contingent events."
Mr. Almario said they would call on insurance companies to have their agents attend trainings on micro-insurance later next year. "LGUs may also help us in promoting trainings for agents," he added. -- Prinz P. Magtulis
Finance
Posted on 06:36 PM, October 01, 2010
Gov’t eyes micro-insurance regulation next year
THE FINANCE Department is aiming to regulate all micro-insurance institutions by next year, with a technical working group finalizing a roadmap toward literacy in an indemnity targeting the low-income sector.
Finance Undersecretary Gil S. Beltran said the roadmap will help the government regulate micro-insurance companies, noting that there are many "fly-by-night" insurers without citing data.
"They are not exactly illegal. They are legitimate. It’s just that we have to move them all to the regulatory net," Mr. Beltran said at the sidelines of a micro-finance forum yesterday at the Century Park Hotel in Manila.
Mario C. Valdes, general manager of the Philippine Insurers and Reinsurers Association (PIRA) and member of the working group, said about 17,000 cooperatives offering insurance to their members should register with the Insurance Commission pursuant to its circular last January.
Memorandum Circular (MC) 1-2010 has laid out regulations covering micro-insurance, among them, that premiums to be paid by policy holders should not exceed 5% of the daily minimum wage in Metro Manila, and that insurance coverage should not be more than 500 times of it.
At current rates, micro-insurers should not charged policy holders more than P20 a day with coverage not exceeding P200,000 a year.
"We are targeting that by next year, all companies [offering micro-insurance] and their agents should be registered with the Insurance Commission," Mr. Valdes said by phone.
To do this, information dissemination about micro-insurance is ongoing nationwide. This is being facilitated by the working group composed of representatives from the Finance department-National Credit Council (NCC), Insurance Commission, Securities and Exchange Commission, and the National Anti-Poverty Commission, PIRA and other insurance associations, among others.
In the forum on Friday, NCC Executive Director Joselito S. Almario also said the working group would also distribute modules by the second quarter of next year to "increase knowledge" of different sectors such as the local government units and "potential clients" about micro-insurance.
"The problem is that companies offering micro-insurance do not know how to go down to the level of the informal sector, while informal sector is not even familiar about micro-insurance," Mr. Almario said in a separate interview.
He noted micro-insurance "had long been offered by insurance companies" only that the term was only coined by the government last January.
Michael F. Rellosa, president of the Fortune General Insurance Corp., cited an example. He said his company has been offering for five years now a one-time travel insurance, wherein policy holders who would travel in the future may pay only P50 for a coverage worth P100,000.
"If for example you would go to Baguio, you can avail yourself of this travel insurance. Para siyang tinge na insurance," Mr. Rellosa said in a separate interview.
Under MC 1-2010, micro-insurance is defined as "an activity providing specific insurance [and] insurance-like... products and services that meet the needs of the low-income sector for risk protection... and other contingent events."
Mr. Almario said they would call on insurance companies to have their agents attend trainings on micro-insurance later next year. "LGUs may also help us in promoting trainings for agents," he added. -- Prinz P. Magtulis
Wednesday, August 4, 2010
Bigger is better for insurers, says Purisima
By Ted P. Torres (The Philippine Star) Updated August 03, 2010 12:00 AM Comments (0) View comments
MANILA, Philippines - Newly appointed Finance Secretary Cesar V. Purisima is in favor of a higher capital and risk weighting regime for the country’s insurance industry.
“Bigger is better in this industry,” Purisima said during the 60th anniversary of the Philippine Life Insurance Association (PLIA) last week.
The finance secretary was referring to the country’s insurance industry, which is struggling to raise sufficient capital to cover all risks as well as meet the claims of the insurer public.
There are 120 insurance companies, 34 life and another 86 non-life insurance companies, including one re-insurer. All are required to reflect a minimum P100-million paid up capital covering the period 2009.
Department of Finance Department Order (DO) 27-06 requires that all life and non-life insurance companies must reflect a paid up capital of P250 million (or a P500-million net worth capital) by 2011.
“I am encouraging them (insurers) to prepare for bigger competition,” Purisima said. “They have to be bigger, stronger, and better capitalized.”
Majority of the life insurance firms have actual capital well beyond the required P100-million paid up capital for 2009. But industry sources said that a handful of life insurers might not be able to reflect legitimate paid-up capital of P125 million for period 2010.
“That is fine since we want bigger, stronger, healthier, and liquid firms that can meet our standards as well as the claims of the insuring public,” finance officials said.
After all, increasing capital that is risk-weighted is a global standard. Last year, a significant number of large commercial banks already went to the capital markets to raise funds ahead of global standards.
“Our interest is a healthier insurance industry, I hope we can revitalize them,” the finance secretary said.
The life insurers ranked in the top 10 in fact account for roughly 80 percent of total premiums yearly.
Among the non-life insurers, only a third have reflected paid-up capital of more than P100 million. The next 20 or so players reflected a flat P100 million paid up capital based on data from the Insurance Commission (IC).
In terms of gross premiums, only a quarter of the non-life insurers account for 70 percent of the business.
Purisima also wants the insurers to invest in infrastructure although the methodology has still to be worked out.
“The very nature of their industry is long term, and infrastructure investments are not only long term but a direct benefit to the economy,” he said before the life insurers.
The finance secretary said that a vibrant insurance industry is a crucial component to savings and investment
generation.
MANILA, Philippines - Newly appointed Finance Secretary Cesar V. Purisima is in favor of a higher capital and risk weighting regime for the country’s insurance industry.
“Bigger is better in this industry,” Purisima said during the 60th anniversary of the Philippine Life Insurance Association (PLIA) last week.
The finance secretary was referring to the country’s insurance industry, which is struggling to raise sufficient capital to cover all risks as well as meet the claims of the insurer public.
There are 120 insurance companies, 34 life and another 86 non-life insurance companies, including one re-insurer. All are required to reflect a minimum P100-million paid up capital covering the period 2009.
Department of Finance Department Order (DO) 27-06 requires that all life and non-life insurance companies must reflect a paid up capital of P250 million (or a P500-million net worth capital) by 2011.
“I am encouraging them (insurers) to prepare for bigger competition,” Purisima said. “They have to be bigger, stronger, and better capitalized.”
Majority of the life insurance firms have actual capital well beyond the required P100-million paid up capital for 2009. But industry sources said that a handful of life insurers might not be able to reflect legitimate paid-up capital of P125 million for period 2010.
“That is fine since we want bigger, stronger, healthier, and liquid firms that can meet our standards as well as the claims of the insuring public,” finance officials said.
After all, increasing capital that is risk-weighted is a global standard. Last year, a significant number of large commercial banks already went to the capital markets to raise funds ahead of global standards.
“Our interest is a healthier insurance industry, I hope we can revitalize them,” the finance secretary said.
The life insurers ranked in the top 10 in fact account for roughly 80 percent of total premiums yearly.
Among the non-life insurers, only a third have reflected paid-up capital of more than P100 million. The next 20 or so players reflected a flat P100 million paid up capital based on data from the Insurance Commission (IC).
In terms of gross premiums, only a quarter of the non-life insurers account for 70 percent of the business.
Purisima also wants the insurers to invest in infrastructure although the methodology has still to be worked out.
“The very nature of their industry is long term, and infrastructure investments are not only long term but a direct benefit to the economy,” he said before the life insurers.
The finance secretary said that a vibrant insurance industry is a crucial component to savings and investment
generation.
Thursday, July 1, 2010
NEW INSURANCE RULES DRAFTED
Business World, Finance
Posted on 09:40 PM, June 28, 2010
BY LOUELLA D. DESIDERIO, Reporter
NONGOVERNMENT organizations (NGOs) and cooperatives running informal microin-surance schemes that have been ordered shut down by the government will have to use members’ contributions to pay for the premiums of new insurance plans.
Joint Memorandum Circular No. 2 of the Insurance Commission (IC), Cooperative Development Authority (CDA) and the Securities and Exchange Commission (SEC), which has yet to be released, provides the rules on how funds collected by NGOs and cooperatives must be used once their in-house microinsu-rance schemes are terminated.
Under the joint memorandum circular, funds collected by entities with informal micro-insurance schemes that will formalize their activities -- either by partnering with licensed insurance companies or setting up their own insurance companies -- shall be used to pay for the premiums or fees of insurance or “insurance-like” products.
The funds can also pay for the fees to mutual benefit associations (MBAs) -- set up especially by NGOs to provide microinsurance to members -- where the contributors become members.
For cooperatives, the funds will be used for members’ share capital contributions to a single-purpose or multi-purpose cooperative that would provide their insurance needs. Any excess funds shall be placed in members’ savings accounts in these cooperatives.
In a telephone interview at the weekend, Joselito S. Almario, deputy executive director of the National Credit Council, which implements the national strategy and regulatory framework for microinsurance, said the government came up with rules on the use of funds collected under informal microinsurance schemes in order to protect contributors.
“The circular defines what they (NGOs and cooperatives) will do with the funds collected. If they will formalize, it has to be used for the payment of premiums for the benefit of the people. It is protection for people who paid premiums before,” he explained.
He said that without the rules, some entities may use the funds for their lending operations and may find it difficult to collect the funds when the borrowers are unable to pay.
He said the circular being issued following Joint Memorandum Circular No.1 of the IC, CDA and SEC released earlier this year, which terminated infor-mal microinsurance or insurance-like schemes and ordered organizations that extended these to either partner with commercial insurers or incorporate themselves into an insurance firm, a coope-rative, or MBA.
“If you want to get into the insurance activity, you have to get authorization,” he said.
Failure of entities to formalize their activities will result in the revocation of primary franchise or the filing of criminal charges against concerned individuals.
He said the circular will be released this week after it has been signed by the the heads of the concerned agencies.
He said the joint memorandum circular has been signed by Insurance Commissioner Santiago Javier Ranada and SEC Chairman Fe B. Barin, but still needs to be signed by CDA Chairman Lecira V. Juarez and notated by Finance Secretary Margarito B. Teves.
Mr. Almario said many NGOs and cooperatives will be affected by the new joint order. But Microfinance Council of the Philippines Executive Director Lalaine M. Joyas said in a telephone interview on Sunday the council has yet to determine the number of NGOs that will be affected by the circular.
Posted on 09:40 PM, June 28, 2010
BY LOUELLA D. DESIDERIO, Reporter
NONGOVERNMENT organizations (NGOs) and cooperatives running informal microin-surance schemes that have been ordered shut down by the government will have to use members’ contributions to pay for the premiums of new insurance plans.
Joint Memorandum Circular No. 2 of the Insurance Commission (IC), Cooperative Development Authority (CDA) and the Securities and Exchange Commission (SEC), which has yet to be released, provides the rules on how funds collected by NGOs and cooperatives must be used once their in-house microinsu-rance schemes are terminated.
Under the joint memorandum circular, funds collected by entities with informal micro-insurance schemes that will formalize their activities -- either by partnering with licensed insurance companies or setting up their own insurance companies -- shall be used to pay for the premiums or fees of insurance or “insurance-like” products.
The funds can also pay for the fees to mutual benefit associations (MBAs) -- set up especially by NGOs to provide microinsurance to members -- where the contributors become members.
For cooperatives, the funds will be used for members’ share capital contributions to a single-purpose or multi-purpose cooperative that would provide their insurance needs. Any excess funds shall be placed in members’ savings accounts in these cooperatives.
In a telephone interview at the weekend, Joselito S. Almario, deputy executive director of the National Credit Council, which implements the national strategy and regulatory framework for microinsurance, said the government came up with rules on the use of funds collected under informal microinsurance schemes in order to protect contributors.
“The circular defines what they (NGOs and cooperatives) will do with the funds collected. If they will formalize, it has to be used for the payment of premiums for the benefit of the people. It is protection for people who paid premiums before,” he explained.
He said that without the rules, some entities may use the funds for their lending operations and may find it difficult to collect the funds when the borrowers are unable to pay.
He said the circular being issued following Joint Memorandum Circular No.1 of the IC, CDA and SEC released earlier this year, which terminated infor-mal microinsurance or insurance-like schemes and ordered organizations that extended these to either partner with commercial insurers or incorporate themselves into an insurance firm, a coope-rative, or MBA.
“If you want to get into the insurance activity, you have to get authorization,” he said.
Failure of entities to formalize their activities will result in the revocation of primary franchise or the filing of criminal charges against concerned individuals.
He said the circular will be released this week after it has been signed by the the heads of the concerned agencies.
He said the joint memorandum circular has been signed by Insurance Commissioner Santiago Javier Ranada and SEC Chairman Fe B. Barin, but still needs to be signed by CDA Chairman Lecira V. Juarez and notated by Finance Secretary Margarito B. Teves.
Mr. Almario said many NGOs and cooperatives will be affected by the new joint order. But Microfinance Council of the Philippines Executive Director Lalaine M. Joyas said in a telephone interview on Sunday the council has yet to determine the number of NGOs that will be affected by the circular.
Thursday, April 1, 2010
International investment fund seeks microinsurance partners
By Ted P. Torres
The Philippine Star
Updated March 30, 2010 12:00 AM
MANILA, Philippines - An international investment fund is planning to invest up to P1.1 billion (approximately $25 million) for microinsurance initiatives in the Philippines.
The P1.1 billion is part of a microinsurance fund amounting to $110 million (P5 billion) allocated for investments in businesses that are designed to deliver affordable insurance in Asia and Africa.
LeapFrog Investments is an investment fund that targets strong returns for its investors, tapping the estimated microinsurance market of 1.5 billion people in emerging markets.
Through its portfolio companies, LeapFrog aims to reach 25 million low-income and vulnerable people with essential financial services, 15 million of them women and children, providing protection against life’s tragedies the devastating impact of climate change, and thus ending cycles of poverty.
The fund will be converted into investments of P250 million to P700 million ($5 million to $15 million) and partner with local insurance companies, microinsurers, or businesses with significant distribution platforms that reach the mass market.
In addition to the Philippines, LeapFrog’s priority countries for investment include India, South Africa, Kenya and Ghana.
LeapFrog principal for East Asia Stéphane Chatonsky said that they are looking for partners with innovative insurance and financial services companies or Filipino businesses that own strong distribution platforms.
Chatonsky said that they are guided by the profit-with-purpose investment approach, meaning they manage funds that must earn strong returns for its investors, and at the same time, invest the funds in efforts towards poverty alleviation.
“We will partner with local players and bring to bear resources and our knowledge of global best practices, to ensure Commercial success and impact – supporting the provision of affordable and relevant microinsurance products and other financial products,” she added.
In an earlier interview, LeapFrog founder and president Andrew Kuper said that they would like to take microinsurance to the next level.
“The industry needs to be taken to the next level, both in terms of establishing a new asset class and in terms of demonstrating that microinsurance is a strong business and investment proposition. That success is the swiftest way to open the gates of the capital markets, and make a real dent on mass poverty,” Kuper said.
The three kinds of investment strategy are: investments made on an existing microinsurance company that needs substantial capital and operation guidance; joint venture and co-capitalizing companies with microfinance institutions (MFIs) and other large distributors; and, co-investment with an insurer that seeks to develop an insurance product and distribution network specifically to reach low-income markets.
“We can acquire a large stake in an insurer and help them drive products down the income pyramid,” the LeapFrog president added.
Roughly 70 percent of the Filipino population, or more than 65 million people, are classified as low-income. Yet they have sufficient funds to afford some form of insurance for their families and enterprises. Insurance can have a transformative impact on their lives and livelihoods.
The country’s penetration rate for insurance is still one of the lowest in the region.
That may change as taxes on insurance products have been reduced with the passage of Republic Act 10001, which lowers the premium tax on life insurance policies and fixes the rate of documentary stamp tax (DST).
Likewise, the Bangko Sentral ng Pilipinas (BSP) now allows thrift and rural banks to sell microinsurance products. That however must be differentiated from the traditional and complex life insurance and other financial products being sold by the commercial banking system.
The public and private sector recently signed the Microinsurance Innovations Program for Social Security (MIPSS), a comprehensive program “to improve the risk protection and security of poor people in the Philippines.” In general, that could be translated to microinsurance designed for the poorer sector of society, taking into account cheap insurance products and easy premium payment schemes.
The target for microinsurance is an estimate 1.5 billion vulnerable people in emerging markets. LeapFrog aims to reach 25 million low-income people with essential financial services, 15 million of them are women and children.
Recently, four global institutions have made commitments to LeapFrog. They are: the International Finance Corp. (IFC), the private investment arm of the World Bank Group, which committed $20 million; the board of the Soros Economic Development Fund, a $7-million investment. Flagstone Reinsurance, a global reinsurer, committed $12 million.
The KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development, made the largest single commitment worth $25 million
The Philippine Star
Updated March 30, 2010 12:00 AM
MANILA, Philippines - An international investment fund is planning to invest up to P1.1 billion (approximately $25 million) for microinsurance initiatives in the Philippines.
The P1.1 billion is part of a microinsurance fund amounting to $110 million (P5 billion) allocated for investments in businesses that are designed to deliver affordable insurance in Asia and Africa.
LeapFrog Investments is an investment fund that targets strong returns for its investors, tapping the estimated microinsurance market of 1.5 billion people in emerging markets.
Through its portfolio companies, LeapFrog aims to reach 25 million low-income and vulnerable people with essential financial services, 15 million of them women and children, providing protection against life’s tragedies the devastating impact of climate change, and thus ending cycles of poverty.
The fund will be converted into investments of P250 million to P700 million ($5 million to $15 million) and partner with local insurance companies, microinsurers, or businesses with significant distribution platforms that reach the mass market.
In addition to the Philippines, LeapFrog’s priority countries for investment include India, South Africa, Kenya and Ghana.
LeapFrog principal for East Asia Stéphane Chatonsky said that they are looking for partners with innovative insurance and financial services companies or Filipino businesses that own strong distribution platforms.
Chatonsky said that they are guided by the profit-with-purpose investment approach, meaning they manage funds that must earn strong returns for its investors, and at the same time, invest the funds in efforts towards poverty alleviation.
“We will partner with local players and bring to bear resources and our knowledge of global best practices, to ensure Commercial success and impact – supporting the provision of affordable and relevant microinsurance products and other financial products,” she added.
In an earlier interview, LeapFrog founder and president Andrew Kuper said that they would like to take microinsurance to the next level.
“The industry needs to be taken to the next level, both in terms of establishing a new asset class and in terms of demonstrating that microinsurance is a strong business and investment proposition. That success is the swiftest way to open the gates of the capital markets, and make a real dent on mass poverty,” Kuper said.
The three kinds of investment strategy are: investments made on an existing microinsurance company that needs substantial capital and operation guidance; joint venture and co-capitalizing companies with microfinance institutions (MFIs) and other large distributors; and, co-investment with an insurer that seeks to develop an insurance product and distribution network specifically to reach low-income markets.
“We can acquire a large stake in an insurer and help them drive products down the income pyramid,” the LeapFrog president added.
Roughly 70 percent of the Filipino population, or more than 65 million people, are classified as low-income. Yet they have sufficient funds to afford some form of insurance for their families and enterprises. Insurance can have a transformative impact on their lives and livelihoods.
The country’s penetration rate for insurance is still one of the lowest in the region.
That may change as taxes on insurance products have been reduced with the passage of Republic Act 10001, which lowers the premium tax on life insurance policies and fixes the rate of documentary stamp tax (DST).
Likewise, the Bangko Sentral ng Pilipinas (BSP) now allows thrift and rural banks to sell microinsurance products. That however must be differentiated from the traditional and complex life insurance and other financial products being sold by the commercial banking system.
The public and private sector recently signed the Microinsurance Innovations Program for Social Security (MIPSS), a comprehensive program “to improve the risk protection and security of poor people in the Philippines.” In general, that could be translated to microinsurance designed for the poorer sector of society, taking into account cheap insurance products and easy premium payment schemes.
The target for microinsurance is an estimate 1.5 billion vulnerable people in emerging markets. LeapFrog aims to reach 25 million low-income people with essential financial services, 15 million of them are women and children.
Recently, four global institutions have made commitments to LeapFrog. They are: the International Finance Corp. (IFC), the private investment arm of the World Bank Group, which committed $20 million; the board of the Soros Economic Development Fund, a $7-million investment. Flagstone Reinsurance, a global reinsurer, committed $12 million.
The KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development, made the largest single commitment worth $25 million
Wednesday, March 31, 2010
Insurance fund eyes RP
Business World
March 30, 2010
AN international investment fund specializing in microinsurance is looking for local partners, noting the country’s large untapped market and the government’s promotion of the low-cost insurance product.
In a briefing last week, Stephane Chatonsky, principal of microinsurance fund LeapFrog Investments, said the firm has identified the Philippines as one of its key markets, and is willing to invest up to $25 million of the $110 million raised from various investors in the country.
Mr. Chatonsky said LeapFrog, founded in Luxemberg and maintaining offices in Australia and the US, chose the Philippines because of its attractiveness as investment destination.
“We chose the Philippines because of the stable macroeconomic environment and good potential for growth,” he said.
“The government has also realized [mi-croinsurance] is a good tool for poverty alleviation and it is pushing hard to get commercial insurers and non-profits to develop it.”
Mr. Chatonsky said LeapFrog is looking at investing in large insurance companies and developing their microinsurance products.
It may also invest in smaller firms that sell microinsurance, or tie up with microfi-nance institutions, church groups or telecommunication firms that serve as distribution channels for the products.
Mr. Chatonsky noted that 70% of Filipinos could be classified as “low-income” but can afford to buy insurance so the potential market for microinsurance is “huge.”
LeapFrog, in its website, claimed it is the “world’s first microinsurance fund.” It said it aims to bring financial services to poor people in India, Kenya, Ghana and South Africa, aside from the Philippines.
Its investors include the International Finance Corp. of the World Bank Group, the Soros Economic Development Fund of billionaire investor George Soros and Accion, one of the world’s largest micro-finance institutions.
Insurance Commissioner Santiago Javier Ranada welcomed the development.
“This will help low income groups. We appreciate them helping because as of now there is low coverage for the D and E income groups, especially in rural areas,” he said in a telephone interview yesterday. “Now, they can get insurance for business, life and health.”
Mr. Ranada hopes LeapFrog’s interest in the Philippines signals the start of investments into the local microinsurance industry.
“[Getting investors in the industry is really] the idea behind the release of rules on microinsurance, since people will be more willing to invest if they know the rules of the game,” he added.
Microinsurance, he pointed out, is a potential multibillion-peso industry, given the number of Filipinos belonging to the D and E classes who are without the protection insurance provides.
In January, the Insurance Commission (IC) issued a circular that amended Insurance Memorandum Circular (IMC) 9-2006, the previous order that governed the microinsurance industry.
The new circular states that all insurance firms, cooperatives, and mutual benefit associations licensed by the IC may sell microinsurance products, which may consist of one type, or several -- life, non-life and health -- bundled together.
It also requires microinsu-rance agents to be licensed by the IC, but they do not have to take regular licensure exam. Instead, they must undergo a special training program and pass a qualifying exam.
The circular also redefines microinsurance as those whose amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed 5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
The maximum sum of guaranteed benefits should be not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
Mr. Chatonsky said that aside from providing funding, LeapFrog can provide expertise to help develop the country’s microinsurance industry.
“The big challenge is the distribution channel. It has to be really efficient. You have to reach the poor in a very cost effective way and... some insurers don’t know how to do it,” he said.
“We have done it in India and Africa. It was difficult but we have done it so we are bringing that expertise to the Philippines.”
Mr. Chatonsky said that while microinsurance is good business, it also benefits the poor.
“By providing microinsurance, we give people the opportunity to get out of poverty. This will allow them to manage risks through affordable and quality insurance policies so if something bad happens to them, they can continue to live their lives and accumulate assets,” he said. -- Don Gil K. Carreon
March 30, 2010
AN international investment fund specializing in microinsurance is looking for local partners, noting the country’s large untapped market and the government’s promotion of the low-cost insurance product.
In a briefing last week, Stephane Chatonsky, principal of microinsurance fund LeapFrog Investments, said the firm has identified the Philippines as one of its key markets, and is willing to invest up to $25 million of the $110 million raised from various investors in the country.
Mr. Chatonsky said LeapFrog, founded in Luxemberg and maintaining offices in Australia and the US, chose the Philippines because of its attractiveness as investment destination.
“We chose the Philippines because of the stable macroeconomic environment and good potential for growth,” he said.
“The government has also realized [mi-croinsurance] is a good tool for poverty alleviation and it is pushing hard to get commercial insurers and non-profits to develop it.”
Mr. Chatonsky said LeapFrog is looking at investing in large insurance companies and developing their microinsurance products.
It may also invest in smaller firms that sell microinsurance, or tie up with microfi-nance institutions, church groups or telecommunication firms that serve as distribution channels for the products.
Mr. Chatonsky noted that 70% of Filipinos could be classified as “low-income” but can afford to buy insurance so the potential market for microinsurance is “huge.”
LeapFrog, in its website, claimed it is the “world’s first microinsurance fund.” It said it aims to bring financial services to poor people in India, Kenya, Ghana and South Africa, aside from the Philippines.
Its investors include the International Finance Corp. of the World Bank Group, the Soros Economic Development Fund of billionaire investor George Soros and Accion, one of the world’s largest micro-finance institutions.
Insurance Commissioner Santiago Javier Ranada welcomed the development.
“This will help low income groups. We appreciate them helping because as of now there is low coverage for the D and E income groups, especially in rural areas,” he said in a telephone interview yesterday. “Now, they can get insurance for business, life and health.”
Mr. Ranada hopes LeapFrog’s interest in the Philippines signals the start of investments into the local microinsurance industry.
“[Getting investors in the industry is really] the idea behind the release of rules on microinsurance, since people will be more willing to invest if they know the rules of the game,” he added.
Microinsurance, he pointed out, is a potential multibillion-peso industry, given the number of Filipinos belonging to the D and E classes who are without the protection insurance provides.
In January, the Insurance Commission (IC) issued a circular that amended Insurance Memorandum Circular (IMC) 9-2006, the previous order that governed the microinsurance industry.
The new circular states that all insurance firms, cooperatives, and mutual benefit associations licensed by the IC may sell microinsurance products, which may consist of one type, or several -- life, non-life and health -- bundled together.
It also requires microinsu-rance agents to be licensed by the IC, but they do not have to take regular licensure exam. Instead, they must undergo a special training program and pass a qualifying exam.
The circular also redefines microinsurance as those whose amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed 5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
The maximum sum of guaranteed benefits should be not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
Mr. Chatonsky said that aside from providing funding, LeapFrog can provide expertise to help develop the country’s microinsurance industry.
“The big challenge is the distribution channel. It has to be really efficient. You have to reach the poor in a very cost effective way and... some insurers don’t know how to do it,” he said.
“We have done it in India and Africa. It was difficult but we have done it so we are bringing that expertise to the Philippines.”
Mr. Chatonsky said that while microinsurance is good business, it also benefits the poor.
“By providing microinsurance, we give people the opportunity to get out of poverty. This will allow them to manage risks through affordable and quality insurance policies so if something bad happens to them, they can continue to live their lives and accumulate assets,” he said. -- Don Gil K. Carreon
P1.1B For Microinsurance
The world’s first microinsurance fund, which is partly owned by billionaire investor George Soros, is looking to invest up to P1.1 billion in the Philippines’ fledgling microinsurance industry through partnerships with local insurance companies, banks, retail stores or telecommunications operators. LeapFrog Investments, which is also partly owned by the World Bank’s International Finance Corp. (IFC), on Monday announced it has raised $110 million from global institutions, which it will invest in the microinsurance sectors in Asia and Africa.
Business Mirror
P1.1B for microinsurance
Written by Erik de la Cruz / Reporter
Tuesday, 30 March 2010 21:34
The world’s first microinsurance fund, which is partly owned by billionaire investor George Soros, is looking to invest up to P1.1 billion in the Philippines’ fledgling microinsurance industry through partnerships with local insurance companies, banks, retail stores or telecommunications operators.
LeapFrog Investments, which is also partly owned by the World Bank’s International Finance Corp. (IFC), on Monday announced it has raised $110 million from global institutions, which it will invest in the microinsurance sectors in Asia and Africa.
The Philippines, along with India, South Africa, Ghana and Kenya, is on its list of priority countries to invest in in trying to get a bigger slice of the underserved global microinsurance market, especially in so-called emerging economies.
“We are tremendously excited by the potential of microinsurance in the Philippines,” said Staphane Chatonsky, the LeapFrog principal who leads the fund’s investments in East Asia.
Chatonsky, in a press briefing in Manila, said the fund was planning to make investments of P250 million to P700 million in each partnership deal with a local entity that must be businesses with “significant” distribution platforms that reach the mass market.
Talks were under way with potential partners and they hope to seal agreements soon, he said. But he declined to identify their possible partners.
The Bangko Sentral ng Pilipinas recently announced that rural, cooperative and thrift banks may now sell microinsurance products. The Insurance Commission has released a set of regulations for selling insurance products that meet the poors’ need for risk protection.
“We are here for the long-term and bring unique expertise,” said Chatonsky. “We will partner with local players and bring to bear resources and our knowledge of global practices to ensure commercial success and impact in supporting the provision of affordable and relevant microinsurance products.”
He said they are attracted to the Philippines because while over 70 percent of the population or more than 65 million people are classified as low-income. They have, however, sufficient resources to buy insurance for their families and enterprises.
He also said the Philippines has a relatively stable macroeconomic environment and “good” potential for growth. The government, he added, has been actively promoting microinsurance as a tool for poverty alleviation through appropriate tax, regulatory frameworks, measures, and incentives.
He also mentioned the existence of multiple distribution channels to reach low-income Filipinos such as banks, retail stores, mobile-phone networks, microfinance institutions, and even churches.
The fund has already made its first investment of over $6 million in AllLife, a South African insurer serving people living with HIV and diabetes.
According to Chatonsky, the global market for microinsurance has potential to absorb 1.5 billion policies as of 2009.
Four global institutions were scheduled to announce in Frankfurt on Monday investments in LeapFrog’s profit-with-purpose program. The World Bank’s IFC committed $20 million while the Soros Economic Development Fund has approved a $7-million investment, according to a press statement released in Manila.
Flagstone Reinsurance, a global reinsurer, will invest $12 million while the biggest investment of $25 million is to be made by KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development.
With these investments, LeapFrog said it is now by far the largest dedicated investor in the microinsurance sector worldwide.
Business Mirror
P1.1B for microinsurance
Written by Erik de la Cruz / Reporter
Tuesday, 30 March 2010 21:34
The world’s first microinsurance fund, which is partly owned by billionaire investor George Soros, is looking to invest up to P1.1 billion in the Philippines’ fledgling microinsurance industry through partnerships with local insurance companies, banks, retail stores or telecommunications operators.
LeapFrog Investments, which is also partly owned by the World Bank’s International Finance Corp. (IFC), on Monday announced it has raised $110 million from global institutions, which it will invest in the microinsurance sectors in Asia and Africa.
The Philippines, along with India, South Africa, Ghana and Kenya, is on its list of priority countries to invest in in trying to get a bigger slice of the underserved global microinsurance market, especially in so-called emerging economies.
“We are tremendously excited by the potential of microinsurance in the Philippines,” said Staphane Chatonsky, the LeapFrog principal who leads the fund’s investments in East Asia.
Chatonsky, in a press briefing in Manila, said the fund was planning to make investments of P250 million to P700 million in each partnership deal with a local entity that must be businesses with “significant” distribution platforms that reach the mass market.
Talks were under way with potential partners and they hope to seal agreements soon, he said. But he declined to identify their possible partners.
The Bangko Sentral ng Pilipinas recently announced that rural, cooperative and thrift banks may now sell microinsurance products. The Insurance Commission has released a set of regulations for selling insurance products that meet the poors’ need for risk protection.
“We are here for the long-term and bring unique expertise,” said Chatonsky. “We will partner with local players and bring to bear resources and our knowledge of global practices to ensure commercial success and impact in supporting the provision of affordable and relevant microinsurance products.”
He said they are attracted to the Philippines because while over 70 percent of the population or more than 65 million people are classified as low-income. They have, however, sufficient resources to buy insurance for their families and enterprises.
He also said the Philippines has a relatively stable macroeconomic environment and “good” potential for growth. The government, he added, has been actively promoting microinsurance as a tool for poverty alleviation through appropriate tax, regulatory frameworks, measures, and incentives.
He also mentioned the existence of multiple distribution channels to reach low-income Filipinos such as banks, retail stores, mobile-phone networks, microfinance institutions, and even churches.
The fund has already made its first investment of over $6 million in AllLife, a South African insurer serving people living with HIV and diabetes.
According to Chatonsky, the global market for microinsurance has potential to absorb 1.5 billion policies as of 2009.
Four global institutions were scheduled to announce in Frankfurt on Monday investments in LeapFrog’s profit-with-purpose program. The World Bank’s IFC committed $20 million while the Soros Economic Development Fund has approved a $7-million investment, according to a press statement released in Manila.
Flagstone Reinsurance, a global reinsurer, will invest $12 million while the biggest investment of $25 million is to be made by KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development.
With these investments, LeapFrog said it is now by far the largest dedicated investor in the microinsurance sector worldwide.
Saturday, February 27, 2010
Tuesday, February 16, 2010
Rural banks welcome microinsurance
(The Philippine Star) Updated February 16, 2010 12:00 AM
MANILA, Philippines - The Rural Bankers Association of the Philippines (RBAP) and the Microenterprises Access to Banking Services (MABS) program has expressed its support for initiatives to introduce microinsurance in the country.
Both have also started working with other groups in the insurance industry to support the National Strategy on Microinsurance formally launched last month. These include technical assistance and training for insurance providers in developing and enhancing the quality of microinsurance products and services in the country.
As part of this initiative, RBAP-MABS, USAID, MICRA/Philippines and Mercy Corps MAXIS also held a workshop last Feb. 1-3 at the Asian Institute of Management (AIM) in Makati City entitled “Developing Successful Microinsurance Products.”
RBAP president Joseph Omar Andaya said the event dovetails with the government’s efforts towards developing the Philippines as the microinsurance capital of Asia.
“It (the event) proved to be a fitting follow-through to the recent launching of the National Regulatory Framework and National Strategy for Microinsurance,” Andaya added.
RBAP has actively been advocating for member rural banks to eventually partner with private local insurance companies to provide needed insurance services for their microfinance clients.
Formulation of the strategy and its framework involved the Department of Finance, the Insurance Commission, the National Credit Council, other public and private stakeholders, as well as international agencies.
Aimed at enhancing insurers’ skills in product development, service delivery and marketing, the workshop was participated in by AA International, Country Bankers Life, CocoLife, Malayan Insurance, MicroEnsure Philippines, Philippine Prudential Life and Pioneer Life, mutual benefit associations or MBAs including TSPI, ASKI, RBTI and CARD.
Taking part in the event were representatives of GTZ-German Technical Cooperation, USAID, the Philippine Life Insurance Association (PLIA) and Coop Life Insurance and Mutual Benefit Services (CLIMBS).
The training workshop is considered as the first of its kind in the Philippines and was conducted by Michael McCord, senior microinsurance specialist and president of the Microinsurance Centre of USA. McCord has been conducting a series of meetings with the country’s insurance industry stakeholders in support of RBAP-MABS and MICRA’s efforts in expanding microinsurance services in the Philippines.
MANILA, Philippines - The Rural Bankers Association of the Philippines (RBAP) and the Microenterprises Access to Banking Services (MABS) program has expressed its support for initiatives to introduce microinsurance in the country.
Both have also started working with other groups in the insurance industry to support the National Strategy on Microinsurance formally launched last month. These include technical assistance and training for insurance providers in developing and enhancing the quality of microinsurance products and services in the country.
As part of this initiative, RBAP-MABS, USAID, MICRA/Philippines and Mercy Corps MAXIS also held a workshop last Feb. 1-3 at the Asian Institute of Management (AIM) in Makati City entitled “Developing Successful Microinsurance Products.”
RBAP president Joseph Omar Andaya said the event dovetails with the government’s efforts towards developing the Philippines as the microinsurance capital of Asia.
“It (the event) proved to be a fitting follow-through to the recent launching of the National Regulatory Framework and National Strategy for Microinsurance,” Andaya added.
RBAP has actively been advocating for member rural banks to eventually partner with private local insurance companies to provide needed insurance services for their microfinance clients.
Formulation of the strategy and its framework involved the Department of Finance, the Insurance Commission, the National Credit Council, other public and private stakeholders, as well as international agencies.
Aimed at enhancing insurers’ skills in product development, service delivery and marketing, the workshop was participated in by AA International, Country Bankers Life, CocoLife, Malayan Insurance, MicroEnsure Philippines, Philippine Prudential Life and Pioneer Life, mutual benefit associations or MBAs including TSPI, ASKI, RBTI and CARD.
Taking part in the event were representatives of GTZ-German Technical Cooperation, USAID, the Philippine Life Insurance Association (PLIA) and Coop Life Insurance and Mutual Benefit Services (CLIMBS).
The training workshop is considered as the first of its kind in the Philippines and was conducted by Michael McCord, senior microinsurance specialist and president of the Microinsurance Centre of USA. McCord has been conducting a series of meetings with the country’s insurance industry stakeholders in support of RBAP-MABS and MICRA’s efforts in expanding microinsurance services in the Philippines.
Monday, February 15, 2010
BSP okays microinsurance sales - Business World Feb. 15, 2010
THE POOR may now buy micro-insurance from rural, cooperative and thrift banks after these institutions were green-lighted by the central bank to serve as distributors.
In a statement issued last Friday, the Bangko Sentral ng Pilipinas (BSP) said the Monetary Board the day before had "approved ... the marketing, sale and servicing of microinsurance products by rural, cooperative and thrift banks."
These banks, the BSP added, "are ideal insurance distribution channels as they are the trusted financial institutions in the countryside and have a deeper knowledge and understanding of the low-income market."
Rural banks had clamored to be allowed to sell microinsurance -- aside from the credit life insurance they normally bundle into loans -- noting the additional revenues that big banks were reaping from bancassurance, or the sale of insurance policies within their premises.
Bancassurance rules, however, stipulate that banks should own at least 5% of insurance firms -- a requirement rural banks said they could not fulfill since they were too small to invest in insurance companies.
Rural banks proposed a "partnership model" where they would partner with commercial insurers. They would act as information disseminators and collection agents of the insurers, earning a fee in the process.
The banks also said they wanted to sell microinsurance products other than credit life insurance -- which primarily protects banks from default by clients who are often poor and without collateral -- such as life, crop, and property insurance but needed the central bank’s go-ahead before they could do so.
Officials of the thrift and rural bank associations welcomed the BSP move.
Pascual M. Garcia III, president of the Chamber of Thrift banks, said in a telephone interview yesterday: "Banks will be able to provide products to more customers. These banks are heavily exposed to the micro-sector... [This] will improve penetration of the sector and improve the existing relationship."
Mr. Garcia also said the order would make microinsurance cheaper as insurance firms would not need to open branches and hire people.
Joseph Omar O. Andaya, president of the Rural Bankers Association of the Philippines (RBAP), said the BSP move would further boost lending to the agricultural sector.
"Banks will be more encouraged to lend because when you are in agribusiness, you are subject to the vagaries of nature. Microinsurance mitigates that because banks can recover what they lend, since farmers affected by natural calamities get back seed money to restart their enterprise with insurance," he said.
While the BSP has not released the rules and regulations covering the sale of micro-insurance by rural, cooperative and thrift banks, its statement said banks needed to comply with Insurance Commission rules on microinsurance and verify that insurers have "adequate consumer protection mechanisms."
Both Messrs. Garcia and Andaya could not immediately say how much the sale of microinsurance would add to their bottom line, but said the BSP’s move was significant more for its social implications.
"[Microinsurance] will serve as parachutes for those who were poor but have made good in their lives so they won’t go back to poverty," Mr. Andaya said.
"It’s not going to be a big revenue source," Mr. Garcia said. "Our organizations can provide input on the type of products... Customers will understand about risk that can damage their business and families and pick up appropriate insurance for that. This will give them better chances for recovery and help them manage risk when things happen..."
Mr. Andaya said the RBAP was already in talks with insurance firms for products that could be introduced, but said the government should consider inviting more players from abroad so the cost of microinsurance could go down. -- Don Gil K. Carreon
In a statement issued last Friday, the Bangko Sentral ng Pilipinas (BSP) said the Monetary Board the day before had "approved ... the marketing, sale and servicing of microinsurance products by rural, cooperative and thrift banks."
These banks, the BSP added, "are ideal insurance distribution channels as they are the trusted financial institutions in the countryside and have a deeper knowledge and understanding of the low-income market."
Rural banks had clamored to be allowed to sell microinsurance -- aside from the credit life insurance they normally bundle into loans -- noting the additional revenues that big banks were reaping from bancassurance, or the sale of insurance policies within their premises.
Bancassurance rules, however, stipulate that banks should own at least 5% of insurance firms -- a requirement rural banks said they could not fulfill since they were too small to invest in insurance companies.
Rural banks proposed a "partnership model" where they would partner with commercial insurers. They would act as information disseminators and collection agents of the insurers, earning a fee in the process.
The banks also said they wanted to sell microinsurance products other than credit life insurance -- which primarily protects banks from default by clients who are often poor and without collateral -- such as life, crop, and property insurance but needed the central bank’s go-ahead before they could do so.
Officials of the thrift and rural bank associations welcomed the BSP move.
Pascual M. Garcia III, president of the Chamber of Thrift banks, said in a telephone interview yesterday: "Banks will be able to provide products to more customers. These banks are heavily exposed to the micro-sector... [This] will improve penetration of the sector and improve the existing relationship."
Mr. Garcia also said the order would make microinsurance cheaper as insurance firms would not need to open branches and hire people.
Joseph Omar O. Andaya, president of the Rural Bankers Association of the Philippines (RBAP), said the BSP move would further boost lending to the agricultural sector.
"Banks will be more encouraged to lend because when you are in agribusiness, you are subject to the vagaries of nature. Microinsurance mitigates that because banks can recover what they lend, since farmers affected by natural calamities get back seed money to restart their enterprise with insurance," he said.
While the BSP has not released the rules and regulations covering the sale of micro-insurance by rural, cooperative and thrift banks, its statement said banks needed to comply with Insurance Commission rules on microinsurance and verify that insurers have "adequate consumer protection mechanisms."
Both Messrs. Garcia and Andaya could not immediately say how much the sale of microinsurance would add to their bottom line, but said the BSP’s move was significant more for its social implications.
"[Microinsurance] will serve as parachutes for those who were poor but have made good in their lives so they won’t go back to poverty," Mr. Andaya said.
"It’s not going to be a big revenue source," Mr. Garcia said. "Our organizations can provide input on the type of products... Customers will understand about risk that can damage their business and families and pick up appropriate insurance for that. This will give them better chances for recovery and help them manage risk when things happen..."
Mr. Andaya said the RBAP was already in talks with insurance firms for products that could be introduced, but said the government should consider inviting more players from abroad so the cost of microinsurance could go down. -- Don Gil K. Carreon
Monday, February 1, 2010
New microinsurance rules issued
Business World
Front Page
February 1, 2010
Regulators want informal schemes closed within a year
NEW RULES governing microinsurance were issued on Friday, re-laying the groundwork for the potentially multibillion-peso industry.
The Insurance Commission (IC), which came out with a new circular, also issued a separate set of rules together with two other regulators that close down informal insurance schemes. Both directives were signed on Friday during the launch of a national microinsurance strategy and regulatory framework.
The government is pushing microinsurance for the poor, noting that they risk getting poorer as a result of calamities. Given its insufficient funds, the state is pushing for the development of a private sector-driven microinsurance market.
Studies have shown that while there are formal and informal microinsurance schemes, their penetration rate among the poor is very low.
Microinsurance is distinguished for being low-cost and easy to dispense. The government conservatively estimates sales to hit P2.5 billion annually based on premiums of as low as P1 a day and a client base of seven million.
The first circular which is still unnumbered, said Joselito S. Almario, deputy executive director of the National Credit Council, "implements" the national strategy and regulatory framework and as such serves as the IC’s primary document for regulating the industry.
It amends Insurance Memorandum Circular (IMC) 9-2006 that promoted and defined microinsurance, and spelled out the responsibilities of providers.
IMC 9-2006, Mr. Almario said, was overly focused on mutual benefit associations (MBAs) -- non-profit organizations set up by teachers or government workers, for instance -- to the exclusion of other microinsurance providers.
"The government pushed for MBAs [in providing microinsurance]. But there are cooperatives that do that also," he said.
The new circular states that all insurance firms, cooperatives, and MBAs licensed by the IC may sell microinsurance products, which may consist of one type, or several products -- life, non-life and health -- bundled together.
It also requires microinsurance agents to be licensed by the IC. These agents, however, need not take the regular licensure exam but must undergo a special training program and pass a qualifying exam.
The circular also redefines microinsurance as that where the amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed 5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
Premiums, under IMC 9-2006, were computed at 10% of the daily minimum wage rate.
The new circular retains the old one’s provision that "the maximum sum of guaranteed benefits is not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila."
Meanwhile, Joint IC-CDA-SEC Memorandum Circular 01-2010 terminates "informal insurance" or "insurance-like schemes" and orders organizations that extend these to either partner with commercial insurers or incorporate themselves into an insurance firm, a cooperative, or MBA.
The joint circular was signed by Insurance Commissioner Eduardo T. Malinis, Securities and Exchange Commission (SEC) Chairman Fe B. Barin, and Cooperative Development Authority (CDA) Chairman Lecira V. Juarez.
"Many organizations are operating without a license," Mr. Almario said, "when the law clearly states they get a certificate of authority, essentially a license, from the Insurance Commission."
The circular cites the Insurance Code, which insists that organizations undertaking insurance activities first secure a certificate of authority from the IC, and the Cooperative Code which requires cooperatives undertaking such activities to also get an IC certificate.
There are also entities, including non-profit organizations, registered with the SEC that don’t have the authorization but are extending insurance.
Informal insurance schemes are to close in a year, and their providers may either partner with commercial insurers or encourage members to become members of MBAs or cooperatives.
They may also, within two years, organize themselves into a life or non-life insurer, cooperative, or MBA licensed by the IC.
Deputy Insurance Commissioner Vida T. Chiong said other circulars covering reportorial requirements and the required capitalization would be issued.
For BusinessWorld On-line, click here
Front Page
February 1, 2010
Regulators want informal schemes closed within a year
NEW RULES governing microinsurance were issued on Friday, re-laying the groundwork for the potentially multibillion-peso industry.
The Insurance Commission (IC), which came out with a new circular, also issued a separate set of rules together with two other regulators that close down informal insurance schemes. Both directives were signed on Friday during the launch of a national microinsurance strategy and regulatory framework.
The government is pushing microinsurance for the poor, noting that they risk getting poorer as a result of calamities. Given its insufficient funds, the state is pushing for the development of a private sector-driven microinsurance market.
Studies have shown that while there are formal and informal microinsurance schemes, their penetration rate among the poor is very low.
Microinsurance is distinguished for being low-cost and easy to dispense. The government conservatively estimates sales to hit P2.5 billion annually based on premiums of as low as P1 a day and a client base of seven million.
The first circular which is still unnumbered, said Joselito S. Almario, deputy executive director of the National Credit Council, "implements" the national strategy and regulatory framework and as such serves as the IC’s primary document for regulating the industry.
It amends Insurance Memorandum Circular (IMC) 9-2006 that promoted and defined microinsurance, and spelled out the responsibilities of providers.
IMC 9-2006, Mr. Almario said, was overly focused on mutual benefit associations (MBAs) -- non-profit organizations set up by teachers or government workers, for instance -- to the exclusion of other microinsurance providers.
"The government pushed for MBAs [in providing microinsurance]. But there are cooperatives that do that also," he said.
The new circular states that all insurance firms, cooperatives, and MBAs licensed by the IC may sell microinsurance products, which may consist of one type, or several products -- life, non-life and health -- bundled together.
It also requires microinsurance agents to be licensed by the IC. These agents, however, need not take the regular licensure exam but must undergo a special training program and pass a qualifying exam.
The circular also redefines microinsurance as that where the amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed 5% of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
Premiums, under IMC 9-2006, were computed at 10% of the daily minimum wage rate.
The new circular retains the old one’s provision that "the maximum sum of guaranteed benefits is not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila."
Meanwhile, Joint IC-CDA-SEC Memorandum Circular 01-2010 terminates "informal insurance" or "insurance-like schemes" and orders organizations that extend these to either partner with commercial insurers or incorporate themselves into an insurance firm, a cooperative, or MBA.
The joint circular was signed by Insurance Commissioner Eduardo T. Malinis, Securities and Exchange Commission (SEC) Chairman Fe B. Barin, and Cooperative Development Authority (CDA) Chairman Lecira V. Juarez.
"Many organizations are operating without a license," Mr. Almario said, "when the law clearly states they get a certificate of authority, essentially a license, from the Insurance Commission."
The circular cites the Insurance Code, which insists that organizations undertaking insurance activities first secure a certificate of authority from the IC, and the Cooperative Code which requires cooperatives undertaking such activities to also get an IC certificate.
There are also entities, including non-profit organizations, registered with the SEC that don’t have the authorization but are extending insurance.
Informal insurance schemes are to close in a year, and their providers may either partner with commercial insurers or encourage members to become members of MBAs or cooperatives.
They may also, within two years, organize themselves into a life or non-life insurer, cooperative, or MBA licensed by the IC.
Deputy Insurance Commissioner Vida T. Chiong said other circulars covering reportorial requirements and the required capitalization would be issued.
For BusinessWorld On-line, click here
Saturday, January 30, 2010
Microinsurance business formally kicks off
Business World, Finance
January 30, 2010
The government on Friday formally jumpstarted the microinsurance business, which targets the poor as clients, by launching the national strategy and regulatory framework for the industry.
Representatives from the government -- the Department of Finance, Securities and Exchange Commission, Bangko Sentral ng Pilipinas, Insurance Commission, Cooperative Development Authority and state health insurer Philippine Health Insurance Corp. -- signed the two documents in a ceremony at the Philippine International Convention Center in Pasay City.
The national strategy and regulatory framework for microinsurance were completed by a technical working group composed of representatives of state agencies and nongovernment organizations last Nov. 13.
The government defines microinsurance as a low-cost insurance that provides the poor protection and relief against distress, misfortune or contingent event.
"We believe that promoting, supporting and advocating microinsurance is one invaluable step towards freeing our people from those chains of poverty," Finance Secretary Margarito B. Teves said in his keynote speech during the event.
The national strategy for microinsurance states the objective, the roles of the various stakeholders and the strategies to be implemented in improving access to insurance of the poor, the self-employed and their families. It also provides ways to encourage those who are providing informal insurance and insurance-like activities to register and to comply with existing regulations set by the government.
The regulatory framework specifies that commercial life and non-life insurance firms, mutual benefit associations, cooperative insurance societies, pre-need firms and health maintenance organizations, among others, which sell microinsurance, should be registered and licensed by the state.
Finance Undersecretary Gil S. Beltran said that this will eliminate "fly by night" microinsurance firms and eradicate "scams."
"We will try to avoid these by coming up with a uniform set of rules to be followed by regulators and microinsurance firms. And nobody will escape the net," he said in an interview. -- BUA
January 30, 2010
The government on Friday formally jumpstarted the microinsurance business, which targets the poor as clients, by launching the national strategy and regulatory framework for the industry.
Representatives from the government -- the Department of Finance, Securities and Exchange Commission, Bangko Sentral ng Pilipinas, Insurance Commission, Cooperative Development Authority and state health insurer Philippine Health Insurance Corp. -- signed the two documents in a ceremony at the Philippine International Convention Center in Pasay City.
The national strategy and regulatory framework for microinsurance were completed by a technical working group composed of representatives of state agencies and nongovernment organizations last Nov. 13.
The government defines microinsurance as a low-cost insurance that provides the poor protection and relief against distress, misfortune or contingent event.
"We believe that promoting, supporting and advocating microinsurance is one invaluable step towards freeing our people from those chains of poverty," Finance Secretary Margarito B. Teves said in his keynote speech during the event.
The national strategy for microinsurance states the objective, the roles of the various stakeholders and the strategies to be implemented in improving access to insurance of the poor, the self-employed and their families. It also provides ways to encourage those who are providing informal insurance and insurance-like activities to register and to comply with existing regulations set by the government.
The regulatory framework specifies that commercial life and non-life insurance firms, mutual benefit associations, cooperative insurance societies, pre-need firms and health maintenance organizations, among others, which sell microinsurance, should be registered and licensed by the state.
Finance Undersecretary Gil S. Beltran said that this will eliminate "fly by night" microinsurance firms and eradicate "scams."
"We will try to avoid these by coming up with a uniform set of rules to be followed by regulators and microinsurance firms. And nobody will escape the net," he said in an interview. -- BUA
Friday, January 29, 2010
Microinsurance to Yield P2.5B, DoF says
Business World, Economy
BY ALEXIS DOUGLAS B. ROMERO, Reporter
January 29, 2010
PREMIUMS TO BE RAISED from the sale of just one microinsurance product can hit at least P2.5 billion per year if all the beneficiaries of the government’s microfinance programs were covered, the Finance department said.
Joselito S. Almario, deputy executive director of the Finance department’s National Credit Council, said the computation is based on a "conservative" assumption of a P1 per day premium for seven million clients.
"At P1 per day of premium covering just the risk protection needs of seven million microfinance clients, annual business potential will amount to P2.5 billion," he told BusinessWorld in a telephone interview. "It is just a conservative figure. It is based on just one microinsurance product. It does not include other potential clients such as those in the informal sector and those who are self-employed. It is also based on a daily premium of P1."
Mr. Almario said the assumption can apply to the sale of any microinsurance product such as health, life, or nonlife.
The Finance official noted that the amount of premium contribution per microinsurance policy cannot exceed P19 per day to make them affordable to the poorest sectors.
"It can be higher if the premium collected by the insurance provider is more than P1 per day. The potential of the microinsurance business is big," he said.
Mr. Almario said these premium contributions are on top of the earnings that a firm can generate from their investments.
"When they invest the money they collected, they [companies who will offer microinsurance] can earn further," he said.
Finance Undersecretary Gil S. Beltran, who is also executive director of the National Credit Council, believes that the microinsurance policies would draw support even from those in the low-income brackets.
"We all need the security. This will prod them [poor] to avail of the products. This will reduce the risk on their livelihood," he said in an interview.
"With risk protection, we can make the poor participate more actively in the economy."
The government defines microinsurance as a product that "meets the needs of the disadvantaged for risk protection and relief against distress or misfortune."
Finance officials have said that the potential beneficiaries of the low-priced insurance schemes can be as high as 42 million. This was based on the assumption that each of the seven million microfinance clients belong to a family of six.
The government is set to launch today the national strategy and the regulatory framework for microinsurance, which will formally mark the beginning of the industry.
The national strategy for microinsurance states the objective, the roles of the various stakeholders and the strategies to be implemented in improving access to insurance of the poor, the self-employed and their families. It also provides ways to encourage those who are providing informal insurance and insurance-like activities to register and to comply with existing regulations set by the government.
Under the strategy framework, the government and other stakeholders will provide an appropriate policy and regulatory framework, monitor informal insurance schemes and encourage them to register their operations, and institutionalize financial literacy.
The regulatory framework, meanwhile, enumerates the requirements and standards that facilitate the sound delivery of microinsurance products and services by the private sector.
It states that microinsurance products can only be provided by entities registered and licensed by appropriate government regulatory bodies such as commercial life insurance companies, commercial nonlife insurance companies, mutual benefit associations, cooperative insurance societies, insurance or service cooperatives, pre-need companies and health maintenance organizations.
Mr. Beltran said other microinsurance regulations will be finalized within the year.
The regulatory and strategic frameworks were created by technical working groups composed of representatives from the Finance Department, the Insurance Commission, Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, National Anti-Poverty Commission ,and Philippine Health Insurance Corp. It was approved by a steering committee last November after a series of consultations held nationwide.
The Asian Development Bank and the German Technical Cooperation have agreed to help the government develop the microinsurance market in the Philippines.
BY ALEXIS DOUGLAS B. ROMERO, Reporter
January 29, 2010
PREMIUMS TO BE RAISED from the sale of just one microinsurance product can hit at least P2.5 billion per year if all the beneficiaries of the government’s microfinance programs were covered, the Finance department said.
Joselito S. Almario, deputy executive director of the Finance department’s National Credit Council, said the computation is based on a "conservative" assumption of a P1 per day premium for seven million clients.
"At P1 per day of premium covering just the risk protection needs of seven million microfinance clients, annual business potential will amount to P2.5 billion," he told BusinessWorld in a telephone interview. "It is just a conservative figure. It is based on just one microinsurance product. It does not include other potential clients such as those in the informal sector and those who are self-employed. It is also based on a daily premium of P1."
Mr. Almario said the assumption can apply to the sale of any microinsurance product such as health, life, or nonlife.
The Finance official noted that the amount of premium contribution per microinsurance policy cannot exceed P19 per day to make them affordable to the poorest sectors.
"It can be higher if the premium collected by the insurance provider is more than P1 per day. The potential of the microinsurance business is big," he said.
Mr. Almario said these premium contributions are on top of the earnings that a firm can generate from their investments.
"When they invest the money they collected, they [companies who will offer microinsurance] can earn further," he said.
Finance Undersecretary Gil S. Beltran, who is also executive director of the National Credit Council, believes that the microinsurance policies would draw support even from those in the low-income brackets.
"We all need the security. This will prod them [poor] to avail of the products. This will reduce the risk on their livelihood," he said in an interview.
"With risk protection, we can make the poor participate more actively in the economy."
The government defines microinsurance as a product that "meets the needs of the disadvantaged for risk protection and relief against distress or misfortune."
Finance officials have said that the potential beneficiaries of the low-priced insurance schemes can be as high as 42 million. This was based on the assumption that each of the seven million microfinance clients belong to a family of six.
The government is set to launch today the national strategy and the regulatory framework for microinsurance, which will formally mark the beginning of the industry.
The national strategy for microinsurance states the objective, the roles of the various stakeholders and the strategies to be implemented in improving access to insurance of the poor, the self-employed and their families. It also provides ways to encourage those who are providing informal insurance and insurance-like activities to register and to comply with existing regulations set by the government.
Under the strategy framework, the government and other stakeholders will provide an appropriate policy and regulatory framework, monitor informal insurance schemes and encourage them to register their operations, and institutionalize financial literacy.
The regulatory framework, meanwhile, enumerates the requirements and standards that facilitate the sound delivery of microinsurance products and services by the private sector.
It states that microinsurance products can only be provided by entities registered and licensed by appropriate government regulatory bodies such as commercial life insurance companies, commercial nonlife insurance companies, mutual benefit associations, cooperative insurance societies, insurance or service cooperatives, pre-need companies and health maintenance organizations.
Mr. Beltran said other microinsurance regulations will be finalized within the year.
The regulatory and strategic frameworks were created by technical working groups composed of representatives from the Finance Department, the Insurance Commission, Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, National Anti-Poverty Commission ,and Philippine Health Insurance Corp. It was approved by a steering committee last November after a series of consultations held nationwide.
The Asian Development Bank and the German Technical Cooperation have agreed to help the government develop the microinsurance market in the Philippines.
Tuesday, January 26, 2010
January 29 Program for the Launching
Microinsurance Launch Program
2:00 – 3:00 pm Registration
Viewing of Displays/Exhibits
3:00 – 4:00 pm Prayer
National Anthem
Short Messages
Asian Development Bank (ADB)
German Technical Cooperation (GTZ)
Keynote Address
Secretary Margarito B. Teves
Audio-Visual Presentation
Signing
National Strategy for Microinsurance
Regulatory Framework for Microinsurance
Presentation of Plaques of Appreciation to the
Members of the Technical Working Groups
Announcement of the Sixth (6th) International Microinsurance Conference
Munich Re Foundation
Closing Remarks
Commissioner Eduardo T. Malinis
4:00 – 6:00 pm Cocktails
2:00 – 3:00 pm Registration
Viewing of Displays/Exhibits
3:00 – 4:00 pm Prayer
National Anthem
Short Messages
Asian Development Bank (ADB)
German Technical Cooperation (GTZ)
Keynote Address
Secretary Margarito B. Teves
Audio-Visual Presentation
Signing
National Strategy for Microinsurance
Regulatory Framework for Microinsurance
Presentation of Plaques of Appreciation to the
Members of the Technical Working Groups
Announcement of the Sixth (6th) International Microinsurance Conference
Munich Re Foundation
Closing Remarks
Commissioner Eduardo T. Malinis
4:00 – 6:00 pm Cocktails
Wednesday, January 20, 2010
Crafting of Microinsurance Performance Standards Initiated
In preparation for the full implementation of the National Strategy and the Regulatory Framework for Microinsurance which will be launched on January 29, 2010, the Department of Finance (DOF) and the Insurance Commission (IC) held the 1st meeting of a technical working group (TWG) that will formulate a microinsurance industry performance standards. The organizational meeting was held at the IC on January 19, 2010.
The set of performance standards will help the general public, the Management of microinsurance providers and the regulator in assessing various aspects of operations of microinsurance activities. Particular focus will be on efficiency and effectivenes in the delivery of microinsurance by insurance providers. With the performance standards in place, low income and informal clients of microinsurance providers will be provided transparent information and be protected from unsafe and unsound microinsurance practices.
As agreed during the meeting, the performance standards will bear the acronym "SEGURO" which in Pilipino literally translates to "Insurance". SEGURO stands for S-Solvency and Stability; E-Efficiency; G-Governance; U-Understanding the Product; R-Risk Managment; and O-Outreach.
Aside from the DOF and the IC, the TWG is comprised of private sector representatives from the Actuarial Society of the Philippines (ASP), Chamber of Mutual Benfit Associations Inc.(CHAMBAI), Cooperative Insurance Systems of the Philippines (CISP), Coop Life and Mutual Benefit Services (CLIMBS),Insurance Accountants of the Philippines (IAP), Microfinance Council of the Philippines (MCPI), Philippine Insurers and Reinsurers Association (PIRA), Philippine Life Insurance Association (PLIA) and the Risk Management Solutions, Inc. (RIMANSI).
The development of the microinsurance performance standards is being supported by the Asian Development Bank-Japan Fund for Poverty Reduction under a technical assistance grant "Developing Microinsurance Project"
The next meeting of the TWG will be held on February 3-5, 2010 at Tagaytay City, Philippines.
The set of performance standards will help the general public, the Management of microinsurance providers and the regulator in assessing various aspects of operations of microinsurance activities. Particular focus will be on efficiency and effectivenes in the delivery of microinsurance by insurance providers. With the performance standards in place, low income and informal clients of microinsurance providers will be provided transparent information and be protected from unsafe and unsound microinsurance practices.
As agreed during the meeting, the performance standards will bear the acronym "SEGURO" which in Pilipino literally translates to "Insurance". SEGURO stands for S-Solvency and Stability; E-Efficiency; G-Governance; U-Understanding the Product; R-Risk Managment; and O-Outreach.
Aside from the DOF and the IC, the TWG is comprised of private sector representatives from the Actuarial Society of the Philippines (ASP), Chamber of Mutual Benfit Associations Inc.(CHAMBAI), Cooperative Insurance Systems of the Philippines (CISP), Coop Life and Mutual Benefit Services (CLIMBS),Insurance Accountants of the Philippines (IAP), Microfinance Council of the Philippines (MCPI), Philippine Insurers and Reinsurers Association (PIRA), Philippine Life Insurance Association (PLIA) and the Risk Management Solutions, Inc. (RIMANSI).
The development of the microinsurance performance standards is being supported by the Asian Development Bank-Japan Fund for Poverty Reduction under a technical assistance grant "Developing Microinsurance Project"
The next meeting of the TWG will be held on February 3-5, 2010 at Tagaytay City, Philippines.
Tuesday, January 19, 2010
Thursday, January 14, 2010
Tuesday, January 12, 2010
Monday, January 11, 2010
Insurance for the poor a step closer to reality
BusinessWorld - Economy
January 11, 2010
Insurance for the poor a step closer to reality
THE FINANCE department (DoF) will launch on Jan. 29 the national strategy and regulatory framework for microinsurance, in hopes of jumpstarting an industry that will provide insurance policies to the country’s poorest sectors.
"The launching of the national strategy and regulatory framework [for microinsurance] will be held on Jan. 29," Joselito S. Almario, deputy executive director of the Finance department’s National Credit Council, said via e-mail over the weekend.
"We do not have a formal microinsurance industry yet. The event will serve as the beginning of the industry. It will involve all firms that provide [micro]insurance," he explained in a phone interview yesterday.
The Insurance Commission (IC) defines microinsurance as a product that "meets the needs of the disadvantaged for risk protection and relief against distress or misfortune." Specifically, it is an insurance policy whose monthly premium does not exceed P1,050 and maximum amount of life insurance coverage is not more than P175,000.
Finance officials had previously said that the 42 million beneficiaries of the government’s microfinance program are the potential clients of microinsurance schemes. They pointed out that since these people already have access to funds, they are capable of buying insurance products.
In a statement, DoF said the event, whose theme is "Magpaseguro Para Protektado (roughly: ’insure to be protected’)," will outline the government’s policies and directions in providing the poor access to insurance services and products.
"It will create public awareness on the importance of providing appropriate risk protection for the poor through microinsurance and will enjoin the private sector’s participation in the delivery of simple and affordable insurance products for the low-income and informal sectors of society."
The national strategy for microinsurance specifies the objective, the roles of the various stakeholders and strategies to be implemented to improve access to insurance by sectors such as the poor, the self-employed and their families. It also seeks to encourage those who provide informal insurance and insurance-like products to register and to comply with government regulations.
The regulatory framework, meanwhile, will set the minimum requirements and standards that those who plan to deliver these products must meet.
"The regulatory framework is important because this will provide protection to those who avail of insurance policies. We want to make sure that the firms offering these are capable," Mr. Almario said in Filipino.
The strategic framework and the regulatory framework were approved by a steering committee in November last year after a series of consultations held nationwide. The committee consisted of representatives from the from the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, National Anti-Poverty Commission, Philippine Health Insurance Corp., as well as the DoF and IC.
After the launch of the frameworks, Mr. Almario said the next step would involve drawing up detailed performance standards to monitor the quality of service delivered by microinsurance providers.
The Asian Development Bank and the German Technical Cooperation are helping DoF develop the microinsurance market in the Philippines. -- Alexis Douglas B. Romero
January 11, 2010
Insurance for the poor a step closer to reality
THE FINANCE department (DoF) will launch on Jan. 29 the national strategy and regulatory framework for microinsurance, in hopes of jumpstarting an industry that will provide insurance policies to the country’s poorest sectors.
"The launching of the national strategy and regulatory framework [for microinsurance] will be held on Jan. 29," Joselito S. Almario, deputy executive director of the Finance department’s National Credit Council, said via e-mail over the weekend.
"We do not have a formal microinsurance industry yet. The event will serve as the beginning of the industry. It will involve all firms that provide [micro]insurance," he explained in a phone interview yesterday.
The Insurance Commission (IC) defines microinsurance as a product that "meets the needs of the disadvantaged for risk protection and relief against distress or misfortune." Specifically, it is an insurance policy whose monthly premium does not exceed P1,050 and maximum amount of life insurance coverage is not more than P175,000.
Finance officials had previously said that the 42 million beneficiaries of the government’s microfinance program are the potential clients of microinsurance schemes. They pointed out that since these people already have access to funds, they are capable of buying insurance products.
In a statement, DoF said the event, whose theme is "Magpaseguro Para Protektado (roughly: ’insure to be protected’)," will outline the government’s policies and directions in providing the poor access to insurance services and products.
"It will create public awareness on the importance of providing appropriate risk protection for the poor through microinsurance and will enjoin the private sector’s participation in the delivery of simple and affordable insurance products for the low-income and informal sectors of society."
The national strategy for microinsurance specifies the objective, the roles of the various stakeholders and strategies to be implemented to improve access to insurance by sectors such as the poor, the self-employed and their families. It also seeks to encourage those who provide informal insurance and insurance-like products to register and to comply with government regulations.
The regulatory framework, meanwhile, will set the minimum requirements and standards that those who plan to deliver these products must meet.
"The regulatory framework is important because this will provide protection to those who avail of insurance policies. We want to make sure that the firms offering these are capable," Mr. Almario said in Filipino.
The strategic framework and the regulatory framework were approved by a steering committee in November last year after a series of consultations held nationwide. The committee consisted of representatives from the from the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, National Anti-Poverty Commission, Philippine Health Insurance Corp., as well as the DoF and IC.
After the launch of the frameworks, Mr. Almario said the next step would involve drawing up detailed performance standards to monitor the quality of service delivered by microinsurance providers.
The Asian Development Bank and the German Technical Cooperation are helping DoF develop the microinsurance market in the Philippines. -- Alexis Douglas B. Romero
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