MR Microinsurance_2012_03_29.indd - International Labour ...

52 Emerging issues
latter can be prescribed by law, making redistribution among the insured possible.
Th e same health insurance package can then, for example, be sold to poor and rich
members alike, with payments made to poor members being partially fi nanced
by the contributions of the richer ones. Moreover, social insurance schemes give
their members more legal certainty, as they are backed by the State, which must
ultimately take responsibility for all liabilities.
Despite these limitations, microinsurance can be a useful approach to social
protection in some very diff erent settings, as illustrated in Figure 2.3.
Figure 2.3 Possible roles of microinsurance as a social protection instrument
Microinsurance as a supplement
topping up social insurance benefi t
(5th option)
Yes No
State able and willing
to build up social insurance?
Yes State able and willing
to cover entire population
by social insurance?
No
Social insurance is best option
at least for standard risks
No
Microinsurance as a complement
to social insurance in order to allow households
to make full use of both (4th option)
Microinsurance as a substitute
for social insurance (1st option)
Yes No
Social insurance potentially
attactive for entire population?
Linking microinsurance
to social insurance
(3rd option)
Social insurance providing
comprehensive protection against
covered risks?
In all cases
Microinsurance as an alternative
(in parallel) to social insurance
(2nd option)
Microinsurance as a supplement
covering additional risks
(5th option)
First, as a substitute for social insurance: microinsurance can be an option
where the State is unable or unwilling to build up social insurance schemes or
does not want to extend them to those working in the informal economy. Under
such circumstances, microinsurance can fi ll at least part of the widening gap that
results from a lack of governmental action. Th e mutual insurance schemes in
remote rural areas of Western and Central African countries are typical examples
of such a strategy.