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8/9/2019 Vulnerabilities DOF NCC
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8/9/2019 Vulnerabilities DOF NCC
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The Philippine Poverty Situation
(2006)
Filipino
family offive neededP6,274
monthlyincome tostay out of
poverty
An
individualneeds
P15,057annually to
stay out ofpoverty
27 out of
100families are
poor or atotal of 4.7
millionfamilies
33 out of
100Filipinos
are poor ora total of
27.6 millionFilipinos
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In recent years, the poor were given
increased access to savings and credit
facilities (microfinance)
Only a fewlarge MFIs
with anoutreach of
less than half
a millionclients
1997
Over 2000 MFIsare nowoperating
7 millionmicrofinanceclients are beingserved
Largecommercialbanks haveentered the MFmarket
2009
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But savings and credit services are
not enough
The poor need to manage and cope withrisks such as:
Illness or injury,
Death of a family member, and
Manmade or natural disasters
When faced with these events, thecash flow and earning abilities of
the poor are affected.
Micro credit and savings alonedoes not protect the poor from
risks
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Of the 27.6 million poor Filipinos . . .
Only about 2.9 millionhave some kind of risk
protection
Almost half of which is
provided informally byvarious entities
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THUS the need for appropriate risk
protection for the poor
Need for products for risk protection that aretimely, reliable, dependable, affordable andaccessible
Need to improve on delivery mechanisms forappropriate and affordable risk protectionproducts
Need to protect the disadvantaged againstunreasonable, fraudulent and unscrupulous acts.
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To ensure access of the
poor to appropriate risk
protection
NationalSTRATEGY for
Microinsurance
REGULATORYFramework forMicroinsurance
The Pillars of Microinsurance Market
Development were put in place
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Major Players
Government
Intermediaries
DevelopmentPartners
SupportInstitutions
InsuranceProviders
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Key Strategies
Increased Accessto safe
Microinsuranceproducts and
services
Mainstreaming ofInformalInsuranceActivities
Enabling Policy andRegulatory
Environmentencourage greater
private sectorparticipation
Institutionalizationof Financial Literacy
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Scope of the Regulatory
FrameworkCovers insurance, insurance-like andother related activities that cover the
risk protection needs of the poor
Does not cover social insurance schemesand risk protection programs
administered and implemented bygovernment
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Who can Provide
MicroinsuranceCommercial Insurers (Life,Non-Life and Composite)
Cooperatives/CooperativeInsurance Societies
Mutual BenefitAssociations
Pre-Need Companies
Health MaintenanceOrganizations
Only
Regulated
Entities
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Mainstreaming of Informal
Insurance
Within 1 year:
Partner with a licensed
microinsurance provider
Buy a microinsurance productthrough a licensed agent or broker
Join an existing MBA or CIS;
Within 2 years, organizea microinsurance entity
Commercial Insurance
Insurance Cooperative
Mutual Benefit Association
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To ensure that informal insurance will be
under the regulatory environment
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Who cansell MI
Products?
Licensedinsuranceproviders
Regularagents and
brokers
Microinsuranceagent
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Microinsurance Product
Daily Contributions/premiums
not more than 5 percent of the current daily minimum wage
rate(P20.00)
Guaranteed benefitsnot more than 500 times the daily minimum wage rate.
(P200,000.00)
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Clearly state the face amount,
benefits, and terms of the insurancecoverage;
Can be easily understood by theinsured printed in English or Pilipino;
Documentation requirements aresimple;
Manner and frequency of
contributions/premium collectionscoincide with the cash flow of theinsured and are not onerous for theinsured.
Micro
insuranceContracts
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Special Regulatory Space for
Microinsurance Providers
Lowercapitalization
Expanded
admittedassets
Appropriate risk-
based capitalframework
Lower guarantyfund for MBAs
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Special Regulatory Space for
Microinsurance Providers
Shortenedsettlementof claims
SimpleDocuments
EnhancedProcessing of
complaints
Relaxed KYCrequirements
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Microinsurance Agents/Brokers
Not required to take the regular licensureexamination
shall undergo an approved Microinsurance Training Program
and pass a qualifying examination at the end of the Program.
License only covers the solicitation ofmicroinsurance products.
Microinsurance Brokers are required a paid-upcapital equivalent to half of what is required forregular brokers.
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Individuals/Entities
Institutions
engaged inmicrofinanceactivities
Primary
cooperatives
Who can be
licensed as
MicroinsuranceAgent/Broker
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