Access to Insurance Initiative A global programme for

Access to Insurance Initiative A global programme for sound regulatory and supervisory frameworks Improving access to insurance for the lowincome population in Jamaica RECOMMENDATIONS 4 th July 2014 Donna Swiderek, Andrea Camargo, Sekayi Campbell, Martina Wiedmaier. Pfister Financial Services Commission (FSC) Kingston, Jamaica

Jamaica is a Nascent Market To advance inclusion it is essential to HOLISTICALLY APPROACH THE CHALLENGES, to: (i) Identify and address supervisory and regulatory obstacles to offer incentives for providers to offer microinsurance products responsibly; (ii) encourage providers to be innovative and improve the supply of microinsurance products that offer real value to the consumers; (iii) promote demand, (iv) foster trust by protecting microinsurance consumers, treating them fairly and ensuring products offer real value 2

1. Regulatory regime for responsible inclusive insurance • Adoption of a regulatory definition of microinsurance. • Remove barriers for risk carriers (i. e. ) reducing prudential requirements as seen with Microinsurance Mutual Benefit Associations in the Philippines. • Remove access barriers for distribution channels by introducing a new category of microinsurance intermediary distribution channels. • Protect the microinsurance consumer by speeding up and simplifying processes. 3

1. Regulatory regime for responsible inclusive insurance • Simplify microinsurance policies, but also ensure that necessary information for consumers about rights, obligations, applicable procedures, deadlines, complaints-handling and dispute resolution mechanisms will be disclosed in a simple and easy manner. • Develop and enforce separate reporting obligations on microinsurance business. 4

2. Improving the supply of microinsurance products with real value to consumers • Improve the capacity of providers through training staff and management on microinsurance best practices, proportional training for microinsurance agents, market research and seeking quality distribution relationship. • Improve the offer of needed microinsurance products by partnering with those that know the needs of the clients and improving efficiency and innovation to reduce expenses. • Adoption of appropriate public policies that form the basis of public private partnerships (PPP). 5

3. Improving demand take-up • A national financial inclusion strategy should be developed, institutionalized and have the support of key entities. • Integration of financial education in the financial inclusion strategy. • Create more mandatory products and ensure their transparency for client awareness. (i. e. ) mandatory life insurance for fishermen through the Fishers Act that will be in place soon • Create links to Jamaican Diaspora (i. e. ) NHT overseas contributions program, the Ministry of Foreign Affairs, El Salvador links to their Diaspora for microinsurance. • Promote trust through continuous contact; (i. e. ) education and awareness sessions with clients. 6

4. Capacity building for FSC in regards to microinsurance • Pay attention to possible practices of distribution channels that could be assimilated to abuse of a dominant position in the market or excessive and predatory pricing. • Leverage funding for capacity building (i. e. ) FIRST Initiative; which is part of World Bank and offers short term Technical Assistance grants to strengthen financial sectors and build more inclusive financial systems. • Peer exchange- host a regional dialogue with other supervisors, visit supervisors in other countries. • International forums through IAIS, A 2 ii or Munich re to name a few. 7

5. Improving an efficient microinsurance market through a Microinsurance Committee • Who would be on the Committee? o led by FSC, the committee should include providers, distribution channels, government, regulators and supervisor, consumer protection associations, etc. • Consultation on MI regulatory reforms and creation of market conduct initiatives. • Identify MI capacity issues within Jamaica and how to fill them. • Research and help establish a long term business case for MI to assist with industry buy in. 8

5. Improving an efficient microinsurance market through the Microinsurance Committee • Demand: Cooperatively deepen the understanding of the demand for microinsurance by the target population • Supply: Through consultations identify and facilitate steps to improve the microinsurance supply landscape • Establish a monitoring and evaluation (M&E) framework for microinsurance at the country level. 9

6. Protect microinsurance consumers effectively • FSC should map any exception regimes in order to be able to measure the risk that these providers pose for financial stability and consumer protection. • Institutionalise a national strategy of financial education as part of the institutionalisation of the financial inclusion strategy. • Ensure that consumers receive transparent, complete and timely information about the products they purchase (marketing materials and contractual documents). 10

6. Protect microinsurance consumers effectively • FSC should ensure that consumers are aware of the existence and conditions of group insurance policies. • Distribution channels and/or microinsurance intermediaries disclose all the relevant information fully, in a transparent and timely manner, and treat microinsurance consumers fairly. • Insurers should adopt better practices in order to promote trust on microinsurance market. 11

6. Protect microinsurance consumers effectively • Through regulation the FSC must clarify requirements for internal complaints-handling mechanisms in insurance ensuring that they are accessible and affordable. • FSC must ensure that dispute resolution mechanisms will be accessible and affordable for the low-income population. 12

Thank you! www. access-to-insurance. org 13