This document presents findings from the Philippines on the role of regulation in the development of microinsurance markets.
The driving forces behind the development of microinsurance in the Philippines have been its strong mutual/cooperative tradition, informal risk pooling and underwriting, and microfinance growth. The Philippines' insurance regulatory regime explicitly provides for microinsurance. Market characteristics include:
* Market approach of monitoring market trends and tailoring regulation accordingly;
* Creation of a special prudential tier for the underwriting of microinsurance policies and linking this to the allowance for Mutual Benefit Associations (MBAs);
* Institutional flexibility for formal insurers;
* Innovative mechanisms to facilitate formalization of informal insurance operators;
* Group-based and microfinance driven microinsurance;
* Financial inclusion policy that contributed to microfinance and microinsurance sector development.
This study illustrates how MFI-based microinsurance can evolve beyond the provision of credit life insurance to also provide life, accident and capital health insurance to members. Despite some remaining obstacles, a number of policy and regulatory aspects bode well for the growth of microinsurance in the Philippines.
