MR Microinsurance_2012_03_29.indd - International Labour ...

Formalizing the informal insurance inherent in migration
country, depending on where the advertising, entry into the contract, payment
of premiums and other activities occur. The alternative channels described below
may not have the capacity to obtain a broker or agent licence. 8 Often even
licensed agents and brokers have limited authority to market or otherwise assist
in the sale of products by unlicensed insurers. 9 There is some room for nonlicensed
intermediaries to promote migration-linked insurance schemes,
although the scope of activities an intermediary may engage in without a licence
varies greatly by country.
Documentation status. The undocumented status of many immigrants can
pose serious challenges when purchasing insurance products in their host countries.
Insurance companies often request identification documents that migrants
may not have or may be uncomfortable sharing. In most developed countries,
undocumented immigrants have broad rights to access courts and to enforce
rights under contracts, but these rights are often limited in practice, which can
penalize immigrants in the event of a dispute with the insurance company. 10
17.4 Operational opportunities and challenges to migration- and remittancelinked
insurance
Despite the potential market opportunities of migration-linked products, developing
the products, distribution channels and administrative and operational
functions to serve transnational families can be complex. This section outlines
the opportunities and challenges facing migration-linked insurance in the following
areas: 1) marketing and sales; 2) policy issuance; 3) premium payments;
and 4) claims administration. Customer service is especially important, but also
especially complex due to the transnational nature of the families covered (see
Box 17.2). Table 17.3 at the end of the section summarizes the main opportunities
and challenges by model.
8 Brokers (who represent the insured) are almost always required to be licensed, while agents (who represent
insurers) often are not. The rationale for this distinction is that agents are indirectly supervised
by virtue of the fact that they act on behalf of insurers, who are directly supervised. Agents are, however,
often required to be registered with the regulatory authority or a professional association (Vollbrecht,
2000).
9 In addition, both insurers and intermediaries must also comply with advertising laws applicable in
any country in which products are marketed.
10 In the United States, undocumented migrants have a legal right to pursue claims in court (Hagl v.
Jacob Stern & Sons, Inc. and Montoya v. Gateway Ins. Co.) and in the European Union, many
fundamental rights apply to everyone regardless of administrative status, but in practice undocumented
migrants are denied a wide range of social protections (Carrera and Merlino, 2009).
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