BusinessWorld
Finance
Posted on March 07, 2011 08:35:27 PM
THE INSURANCE Commission (IC) has come up with looser licensing requirements for microinsurance agents in a bid to boost the nascent microinsurance industry.
IC released Insurance Memorandum Circular No. 6-2011 dated February 15, but uploaded to its website only last week, exempting microinsurance agents from the required regular licensure examination for insurance agents.
“The applicant for agent’s license shall, in lieu of the examination, undergo an approved and prescribed microinsurance training course and pass the qualifying examination at the end of the course,” the circular said.
IC issues licenses to agents before they can sell products, and this is renewed yearly. Insurance agents are required to pass a written examination by the insurance regulator.
Microinsurance agents, however, will just have to take a course designed by the microinsurance provider, Deputy Comissioner Vida T. Chiong explained to BusinessWorld in a phone interview yesterday.
The training course must cover basic concepts such as the importance of insurance, product types, standard policy provisions and obligations of insurance companies and agents, such as market conduct, claims settlement and the revocation of licenses.
The president of the insurance company and the trainer shall jointly submit to IC a list of those who passed the examination, within five working days after the conduct of the microinsurance training course.
The regulator relaxed the requirements because microinsurance only deals with limited premiums and limited coverages, IC Chief Insurance Specialist Reynaldo M. Vergara told BusinessWorld in a phone interview yesterday.
Insurance agents, in contrast, have the power to charge unlimited premiums and provide unlimited coverage, and therefore are covered by more stringent rules.
The new policy could also act as an incentive for more players to venture into microinsurance.
“[The policy] will encourage microfinance institutions rural banks, cooperatives and nongovernment organizations -- and other community-based institutions to be delivery channels for microinsurance products,” National Credit Council Deputy Executive Director Joselito S. Almario told BusinessWorld in a text message yesterday. “Even civic-oriented groups and sari-sari stores can join the fray!”
With more microinsurance providers, the poor would have greater access to these products, he added.
More microinsurance providers could also bring down delivery costs and consequently reduce premium costs. -- Diane Claire J. Jiao
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