MR Microinsurance_2012_03_29.indd - International Labour ...

Access to insurance and fi nancial sector regulation
Box 25.3 Th e evolving defi nition of microinsurance in Peru
Superintendencia de Banca, Seguros y AFP (SBS) in Peru introduced its fi rst
specifi c regulation on microinsurance in 2007 to promote the provision of
aff ordable insurance to the low-income population.
In terms of product attributes, the regulation was applicable to products that
did not exceed US$3 300 cover limit or US$3.30 monthly premium. Th e focus
was on simplicity and the insurance needs of the target market. Deductibles and
co-payments and any prior assessment of the insured values at the time of under-
writing were prohibited. A list of acceptable claims documents was also to be
specifi ed in a simplifi ed policy document. To assess compliance with these crite-
ria, all microinsurance products were to be fi led and reviewed by the insurance
regulator before being marketed to the public.
In the event of a claim, the policyholder was required to notify the agent or
the sales clerk, who in turn acted as the interface between the policyholder and
insurance company. Th e insurer had the option to pay the claim through the
agent or directly to the policyholder. If the claim was rejected, the policyholder
had the option to make a complaint through the agent, and the insurer was
required to resolve complaints within 15 days.
To reduce costs, marketing through alternative distribution channels (e.g.
sales clerks, MFIs, savings and credit cooperatives, and social organizations) was
allowed in a partner-agent relationship. Th ese channels had access to the lowincome
population and were capable of collecting premiums and quickly han-
dling claims. Th ey were also responsible for explaining the insurance benefi ts and
costs to their clients. Innovative techniques for off ering more tangible insurance
benefi ts (e.g. tickets or certifi cates, regular visits and reports to customers, and
payment in goods and services) were also introduced. Th e insurers were ulti-
mately responsible for the management of risks and regulatory compliance.
When implementing the regulation, the SBS did not see the volume of activ- activ-
ity that it expected, and soon realized that regulatory caps on prices and benefi ts
acted as obstacles to developing microinsurance products. Th erefore, in consultation
with the industry, in 2009 a new regulation removing limits on cover or pre-
miums was introduced to provide a further boost to the market. Microinsurance
is now expected to respond to the protection needs of specifi c groups. Exclusions
can be introduced, if necessary, but are to be kept at a minimum and should be
commensurate with the cover. Minimum information requirements for thesim- plifi ed contracts and documents that insurance companies or intermedi intermediaries aries need
to provide to the policyholders as proof of cover have also been set out.
Th e functions which intermediaries can perform have been expanded and
they are now permitted to collect premiums, attend to claims and pay benefi ts on
behalf of insurance companies, but they have now also been made accountable
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