This document outlines the development of microinsurance policy and regulation in the Philippines. It describes how initially there was an absence of clear policy and regulations for microinsurance, leading to inappropriate products. Reforms began in 2006 with guidelines for mutual benefit associations (MBAs) to offer microinsurance. By 2012, 35 commercial insurers and 19 MBAs were offering microinsurance, covering over 12 million individuals. Lessons learned included how clear, consistent rules and regulations provide transparency and predictability to build trust, while financial literacy and localized dispute mechanisms also promote outreach and access to insurance.

1. MICROINSURANCE: POLICY
AND REGULATORY REFORM
INITIATIVES -
THE PHILIPPINES
BUILDING TRUST, BUILDING BRIDGES
“MUTUAL MICROINSURANCE: WHY? & HOW? FROM A REGULATORY
PERSPECTIVE”
ICMIF-AOA DEVELOPMENT NETWORK SEMINAR ‘IMPROVING ACCESS
TO INSURANCE’
18-20 SEPTEMBER 2013, MAKATI CITY
JOSELITO ALMARIO
DEPARTMENT OF FINANCE, PHILIPPINES

2. WHERE ARE WE BEFORE
ABSENCE OF POLICY
AND REGULATORY
FRAMEWORK
• Vague government
policy direction
• Unclear regulations
and guidelines on
microinsurance
• Hesitant providers
INAPPROPRIATE
PRODUCTS
• Not tailor-fitted
• Unaffordable
• Complex and
complicated
contracts
• Cumbersome
requirements
LACK OF
AWARENESS
• Distrust of insurance
providers
• “Leave it to destiny”
mentality
• No immediate
benefits
• Additional financial
burden

3. THE BEGINNINGS - 2006
• Microinsurance driven by successes in
the microfinance sector
• MFIs form informal insurance schemes,
some MBAs, to meet insurance needs
of their clients
• Government responds by issuing
guidelines for MBAs to deliver
microinsurance
• Policy adopts principle of
proportionality

4. THE EXPANSION - 2009
TECHNICALWORKING
GROUPS
POLICY/
REGULATORY
BODIES
INSURANCE PROVIDERS
(LIFE/NONLIFE - COMMERCIAL,
COOPS, MUTUALS)
INTERMEDIARIES
MICROFINANCE INSTITUTIONS
PUBLICCONSULTATIONS

5. WHAT WERE COVERED
Market Conduct
Product Innovation
and Development
Financial Literacy
and Advocacy
ConsumerValue
and Protection
POLICY AND
REGULATORY
ENVIRONMENT

6. WHAT WERE DONE
2010
2011
2012
• Microinsurance Defined
• Microinsurance Providers Identified
• Branding and SloganConceived
• Formalization Process Clarified
• MicroinsuranceAgents/Brokers Created
(CBOs included)
• Prototype Product Developed
• Contracts Simplified
• Performance Standards Formulated
• Reporting Standards Established
• MBAChart of Accounts Revised
• Trainings on MIAdvocacy and Seminars
• Alternative Dispute Resolution
Mechanism Established July
2013

7. WHERE ARE WE NOW
COMMERCIAL PROVIDERS
• 2008 - 2
• 2012 – 35 (Life – 17, Non-life - 18)
MUTUAL BENEFIT ASSOCIATIONS
• 2008 - 6
• 2009 - 19
PRODUCTS APPROVED
• 2008 – 7
• 2012 – 89 (Life – 38, Non-life – 25, MBAs – 26)
INDIVIDUALS COVERED
• 2008 – About 3 million (mostly credit life including informal
insurance)
• 2012 – 12 million

8. WHERE ARE WE HEADED
Agriculture/
Catastrophic
Microinsurance
Parametric/
Index-based
Products
POS/
Technology –
based Delivery
Platforms

9. WHAT ARE THE LESSONS LEARNED
Clear rules and regulations
provide better
understanding and
transparency
Consistency of
implementation results
in predictability –
branding can help
Financial literacy is
educating, not marketing
Advocacy is convincing,
not selling
Localized and simple
alternative redress
mechanisms promote
effective after-sales
service

10. A CONDUCIVE AND
ENABLING POLICY
AND REGULATORY
ENVIRONMENT –
BUILDS TRUST,
BUILDS BRIDGES
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