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
Saturday, January 30, 2010
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
Wednesday, January 6, 2010
Microinsurance Strategy and Framework Launching - January 29, 2010
The Department of Finance and the Insurance Commission will formally launch the National Strategy and the Regulatory Framework for Microinsurance on January 29, 2010 at the Philippine International Convention Center with the following theme: “ Magpaseguro Para Protektado”.
The milestone documents outline the government’s policy thrusts and directions in providing the poor access to insurance products and services. 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 defines the objective, the roles of the various stakeholders and the key strategies to be pursued in enhancing access to insurance of the poor. It also discusses health insurance for the poor in the context of social protection. Strategies to encourage complementation of the products of PhilHealth by the private sector are also discussed. It also provides directions towards mainstreaming informal insurance and insurance-like activities and the promotion of public awareness and financial literacy.
The Regulatory Framework for Microinsurance, on the other hand, establishes the policy and regulatory environment that will encourage, enhance and facilitate the safe and sound provision of microinsurance products and services by the private sector. It also identifies and promotes a system that will protect the rights and privileges of those who are insured and ultimately enhance trust and confidence on the insurance industry and other providers of insurance-like and other similar products and services.
The National Strategy and Regulatory Framework were crafted by technical working groups formed by the DOF and have undergone a series of regional consultations nationwide in 2009. It was approved by members of a Steering Committee comprised of representatives from the DOF, Insurance Commission, Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, National Anti-Poverty Commission and PhilHealth in a meeting held on December 11, 2009.
The event is the culmination of the observance of the Microinsurance Month. Under Presidential Proclamation 1212, January is declared as Microinsurance Month and appointed the Insurance Commission IC and the DOF as the lead agencies. It enjoins all in the government to "initiate and participate" in various activities.
Delivering the keynote address will be Finance Secretary Margarito Teves. Expected to attend the launching will be, among others, members of the international community, bilateral and multilateral institutions, insurance providers, microfinance institutions (rural banks, cooperatives and non-government organizations), basic sector representatives, government agencies, financial institutions and other major stakeholders.
In support of the government initiative, the Asian Development Bank (ADB) and the German Technical Cooperation (GTZ) are providing technical assistance to the DOF for the development of the microinsurance market in the Philippines. The assistance focus on the establishment of the appropriate policy and regulatory environment; building capacities of both regulators and providers in regulating and providing microinsurance services; product development and financial literacy for both providers and clients of microinsurance.
The milestone documents outline the government’s policy thrusts and directions in providing the poor access to insurance products and services. 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 defines the objective, the roles of the various stakeholders and the key strategies to be pursued in enhancing access to insurance of the poor. It also discusses health insurance for the poor in the context of social protection. Strategies to encourage complementation of the products of PhilHealth by the private sector are also discussed. It also provides directions towards mainstreaming informal insurance and insurance-like activities and the promotion of public awareness and financial literacy.
The Regulatory Framework for Microinsurance, on the other hand, establishes the policy and regulatory environment that will encourage, enhance and facilitate the safe and sound provision of microinsurance products and services by the private sector. It also identifies and promotes a system that will protect the rights and privileges of those who are insured and ultimately enhance trust and confidence on the insurance industry and other providers of insurance-like and other similar products and services.
The National Strategy and Regulatory Framework were crafted by technical working groups formed by the DOF and have undergone a series of regional consultations nationwide in 2009. It was approved by members of a Steering Committee comprised of representatives from the DOF, Insurance Commission, Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, National Anti-Poverty Commission and PhilHealth in a meeting held on December 11, 2009.
The event is the culmination of the observance of the Microinsurance Month. Under Presidential Proclamation 1212, January is declared as Microinsurance Month and appointed the Insurance Commission IC and the DOF as the lead agencies. It enjoins all in the government to "initiate and participate" in various activities.
Delivering the keynote address will be Finance Secretary Margarito Teves. Expected to attend the launching will be, among others, members of the international community, bilateral and multilateral institutions, insurance providers, microfinance institutions (rural banks, cooperatives and non-government organizations), basic sector representatives, government agencies, financial institutions and other major stakeholders.
In support of the government initiative, the Asian Development Bank (ADB) and the German Technical Cooperation (GTZ) are providing technical assistance to the DOF for the development of the microinsurance market in the Philippines. The assistance focus on the establishment of the appropriate policy and regulatory environment; building capacities of both regulators and providers in regulating and providing microinsurance services; product development and financial literacy for both providers and clients of microinsurance.
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