Mcco regulation trends and challenges
Download
1 / 19

MCCO REGULATION: TRENDS AND CHALLENGES - PowerPoint PPT Presentation


  • 118 Views
  • Uploaded on

Enhancing Value in Community-Based Micro Insurance: An MIA Innovation Workshop May 17, 2010 New Delhi. MCCO REGULATION: TRENDS AND CHALLENGES. DR. IAN WEBB . Outline of Presentation. Challenge of Regulating MCCO’s IAIS-MIN Draft Issues Paper

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' MCCO REGULATION: TRENDS AND CHALLENGES' - clove


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Mcco regulation trends and challenges

Enhancing Value in Community-Based Micro Insurance:

An MIA Innovation Workshop

May 17, 2010 New Delhi

MCCO REGULATION: TRENDS AND CHALLENGES

DR. IAN WEBB


Outline of presentation
Outline of Presentation

  • Challenge of Regulating MCCO’s

  • IAIS-MIN Draft Issues Paper

  • MCCO Regulatory Approaches Philippines, Peru

  • MCCO TA Support Institutions, Philippines, Peru, Colombia, D.R.

  • Where Do We Go From Here?



I challenge of regulating mcco s
I. Challenge of Regulating MCCO’s

  • Cost – benefit equation is different

    • Cost of regulation should be less than the benefit

  • Level of resources makes compliance with regulations difficult

  • Variety of MCCO models, cultures and objectives complicates using a single approach

  • Different regulatory agencies may claim jurisdiction

  • Inadequate data on the number and types of MCCO’s existing

  • Little insurance supervisory experience with MCCO’s


Ii mcco surveys studies papers
II. MCCO Surveys, Studies & Papers

  • Joint Working group – IAIS & CGAP (MI Network)

    • Issues paper on Microinsurance (2007)

    • Survey on the role of mutuals, cooperatives and community-based organizations (2008)

    • Issues paper Regulation & supervision of MCCO’s in increasing access to insurance markets (expected 2010.)

    • Next => “More elaborative standards and guidance with respect to issues of access to insurance” (2011 +)

  • ICMIF

    • Planning a survey on mutuals and coops around the world (2010)

    • Planning an analysis of “success stories” behind mutual insurers that started out as microinsurance providers (2010)

    • Publication of ICMIF mutual survey 2008 – size of formal mutual insurance market in each country (2010)


Iais mi draft mcco paper highlights
IAIS-MI Draft MCCO Paper: Highlights

  • Yes

    • Implications for regulation/supervision (ICP’s) arising from mutual nature of organization

    • Grounds and scope for different regulatory/supervisory treatment due to MCCO characteristics

    • Emphasizes positive role MCCO’s play in increasing access to insurance

    • Highlights need to formalize supervision of MCCO’s beyond supervisory radar

  • No

    • Regulatory/supervisory issues arising from microinsurance, or small insurers

    • Specific guidance on how to regulate MCCO’s

    • Guidance on how to address lack of adequate supervision for many MCCO’s

    • Viewpoints and concerns of MCCO’s


Iais mi draft mcco paper contents
IAIS-MI Draft MCCO Paper: Contents

  • Defining Characteristics of MCCO’s

    • Member ownership

    • Democracy

    • Solidarity

    • Created to serve a defined group or purpose

  • Role of MCCO’s in providing access to MI

    • Geographic challenges

    • Cultural challenges

    • Business model challenges

    • Service and product design challenges

    • Socio-econoic circumstances challenges


Iais mi draft mcco paper contents1
IAIS-MI Draft MCCO Paper: Contents

  • Supervisory arrangements

  • Licensing

  • Suitability of persons

  • Changes in control and portfolio transfers

  • Corporate Governance

  • Internal Control

  • On-going Supervision

  • Prudential Requirements

  • Capital Adequacy and Solvency

  • Markets and Consumers

  • Intermediaries

  • Consumer Protection

  • Information, Disclosure and Transparency towards the market




Iii insurance regulatory environment mcco s
III. Insurance Regulatory Environment MCCO’s

  • Philippines

    • Formal MI regulatory framework

    • Licensing structure expanded to incorporate varoius kinds of MI-related activity including conventional insurers, MBA’s, cooperative insurance socieites, pre-need companies & health maintenance organizations.

    • Required simplified and favorable contractual terms, and facilitates commercialization by MCCO’s and others, when definition of MI met

  • Peru

    • Formal MI regulatory framework

    • Superintendency Banks & Insurance and Pension Funds (SBS) 1 tier licensing - only for conventional insurers

    • Required simplified and favorable contract terms, and facilitated commercialization by MCCO’s, when definition of MI met


Iv technical assistance for mcco s
IV. Technical Assistance for MCCO’s

  • Philippines

    • RIMANSI offers thorough and sustained TA support for MBA’s. Insurance companies, through partner-agent model, also provide some TA and product development support for distribution partners. Cooperatives, pre-need companies, HMO’s ’s receive little and scattered TA support from other sources.

  • Peru

    • Insurance companies, through partner-agent model, provide most of the TA and product development support to MCCO’s. Health clinics (Micro-Health), cooperatives, and labor unions receive little and scattered TA support from other sources.

  • Dominican Republic (COOPSEGUROS) & Colombia (La Equidad)

    • Member-owned cooperative insurers licensed by the insurance supervisor provide substantial TA and product development support to cooperatives.

    • Insurance companies through partner-agent model also provide TA and product devlpt.


Ta for mcco s apex institution rimansi
TA for MCCO’s: APEX Institution (RIMANSI)

  • Independently owned (non-stock, non-profit)

  • Member-governed but with full-time professional staff

  • Services

    • Licensing assistance for MCCO’s wishing to establish MBA’s

    • Extensive market surveys to identify risk protection needs of clients

    • Governance structure of MCCO’s behind MBA’s that has built-in attention to satisfaction and needs of client members

    • Professional product development, pricing, reserving, investment services

    • MIS installation and training

    • Prudential and performance monitoring of client MI operations (self-regulatory function recognized by Insurance Commissioner)

    • Corporate governance training


Ta for mcco s cooperative insurers
TA for MCCO’s: Cooperative Insurers

  • Serve the interests of their cooperative members

  • Member-owned and governed, but with full-time professional staff

  • Profit not retained by individual members; shared and administrated by collective

  • Services

    • Extensive market surveys to identify risk protection needs of members

    • Governance structure has built-in attention to satisfaction and needs of members

    • Provide professional product development, pricing, reserving, investment services

    • Financial literacy and other social services (i.e. health education)


V where do we go from here
V. Where Do We Go From Here?

  • Understanding MCCO’s

    • Don’t know the scope/size of number of MCCO’s size of their activities – DATA!

    • Don’t know their interests and strengths, and contributions adequately yet

    • Many questions still be to answered – How are MCCO’s fundamentally different?

    • Do MCCO’s want to be regulated?

    • How do MCCO’s contribute to the insurance market (what are their special roles, in terms of social capital, financial literacy, trust-building?)

    • Are they addressing a market failure, and consequently, require a organizational profile different than a professional insurer?

    • Risk- transfer Vs. Risk-pooling

    • How to balance technical assistance with regulation/supervision?

    • Do different stages of MCCO development that require different types of regulatory/supervisory intervention?


Where do we go from here
Where Do We Go From Here?

  • Exploring viable paths to development and regulation

    • Establishing dialog between key stakeholders (MCCO’s, insurance regulators, other regulatory agencies with jurisdiction, donor agencies) to explore best approach to

      • Regulation and supervision

      • Development of MCCO capacity, performance and integrity

  • Develop adequate and appropriate regulatory/supervisory framework

    • Developing TA and regulatory models with various key stakeholders

    • Learning from practices and experience around the world





ad