Policy and Regulatory Issues and Challenges in Microinsurance: a Philippine Case

Abstract

When poor households face catastrophic events, they do not have any means for risk protection. Access to formal risk protection schemes such as insurance may be a more effective means to minimize the poor households' losses but traditional mainstream insurance has bypassed informal workers and poor households. To fill the gap, microfinance institutions (MFIs) have developed informal "insurance" schemes while the more enterprising MFIs have established licensed mutual benefit associations. This paper discusses the need for an appropriate regulatory framework for microinsurance and provides specific recommendations to address the emerging challenges in this segment of the financial markets.