Market Development

On the topic: Regulatory incentives to foster the growth of inclusive insurance are important. Regulation needs to be proportionate to the nature, scale and complexity of risks inherent in the individual insurance business and strike a balance between “motivating the industry” and “protecting the consumer” if it is going to achieve its intended objectives and expand access to insurance for low-income consumers.

Incentives for insurers and examples of a proportionate approach include:

• a lighter product registration regime;
• allowing for alternate distribution channels;
• more flexibility for payment mechanisms and innovations in product design;
• lower supervisory fees for a microinsurance business line;
• lower capital requirements for this business or certain types of providers that offer lower-risk products.

However, at the same time, certain consumer protection rules may be set higher as they are critical to protecting low income and first-time insurance customers. For example, a standard contract and a shorter time limit might be required for honouring claims.
Participants on the call will discuss different options for creating incentives for insurers and learn how some countries have approached this and what the results are.

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