A2ii Newsletter 11/22
Welcome! In this newsletter, we provide you with updates on the work of the A2ii, events and publications, and experiences and learning on inclusive insurance regulation and supervision across jurisdictions over the past month.
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Since 2017, the Access to Insurance Initiative (A2ii), supported by Reos Partners, has brought together 12 multi-stakeholder country teams from around the world in three Inclusive Insurance Innovation Labs.
The vision all country teams share is to serve as vehicles for inclusion, providing protection and resilience among the vulnerable populations in their countries.
At the recent iii-lab International Dialogue in Frankfurt, we spoke with the alums and the current cohort about the inclusive insurance solutions they've developed and why this is not just another project but a life-changing experience.
The A2ii, ASSAL, and IAIS were pleased to kick off the Financial Inclusion Forum (FIF) - ASSAL regional seminar, hosted by Superintendencia General de Seguros (SUGESE), with over 30 people from the FIF, ASSAL, and guests from the government, industry and academia.
The meeting began with a welcome from Tomás Soley Pérez, chair of the FIF and president of ASSAL, as well as a welcome and presentation on the work on the topic of climate risk from the IAIS and A2ii secretariats. As this is the first time the FIF members meet in person, attendees had a chance to network and meet each other before the tour de table, where they presented on the climate risks and initiatives in their jurisdictions. The ASSAL Climate and Sustainability working group presented their supervisory strategies to mitigating the impact and promoting adaptation to climate change in the insurance sector and there was a presentation on the Colombian approach to climate-related risks.
The A2ii then facilitated an interactive board game called Hotel Resilience, a game developed by GIZ about the prevention, reduction, and transfer of risks. The game was well-received and stimulated discussion on the topic of disaster preparedness before the role-playing workshop.
The first day wrapped up with an introduction to the work of the inclusive insurance innovation lab from the Costa Rican country team, who have just finished their 12 months of work on the third iteration of the Inclusive Insurance Innovation Lab run by the A2ii.
On the second day, presentations were given by Leigh Wolfrom from the OECD and José Ángel Villalobos, from the World Bank, setting the scene for the interactive role-playing workshop on disaster preparedness, facilitated by SUGESE. Participants split into breakout groups to consider various stakeholders’ perspectives on climate risks. After two days of interactive activities, the regional seminar ended with a discussion of the workplan for next year.
After four years of implementation, the GIZ project “Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia III” (RFPI Asia III) will be ending on 31 December 2022. The project closing event was held on 14 October 2022 in a hybrid format – online and in-person in Manila, Philippines.
The event was a celebratory gathering to acknowledge and show gratitude to the partners who have worked with GIZ RFPI since it was first established in 2013 and showcase key achievements.
The event also served as the formal handover of the Mutual Exchange Forum on Inclusive Insurance (MEFIN) to the A2ii who will be integrating insurance supervisors from the seven MEFIN countries into its Asian regional activities. GIZ RFPI Project Director Alexander Jaeger and Head of Secretariat A2ii Hannah Grant participated in a short handover ceremony.
To commemorate the first anniversary of the Board for Financial Policy and Regulation of Ecuador (JPRF), the ‘International Forum: Regulation and Responsible Finance’ was held on 17 October. The Institution, chaired by María Paulina Vela, is a space to transmit knowledge, share experiences and answer questions about regulatory issues of global relevance that may impact the country.
Moderated by Catalina Pazos, member of the Board, Regina Simões, A2ii regional coordinator, presented on microinsurance and financial inclusion.
More than 100 people attended the virtual event, which included representatives of the supervisory authorities (Superintendence of Banks; Superintendence of Popular and Solidarity Economy; Superintendence of Companies, Securities and Insurance; Central Bank); Ministry of Economy and Finance, Ministry of Education, Ministry of Telecommunications, Ministry of Foreign Affairs and Ministry of Economic and Social Inclusion; International organizations (CAF, World Bank, IDB, IMF); and regulated entities (banks, cooperatives, mutuals, stock exchanges, broker-dealers, credit rating agencies, fund and trust administrators, insurance companies and health service providers).
Supporting Inclusive Insurance Markets Through the Formalisation of Insurance Schemes: The Inkopdit Experience | 18 October
On 18 October, GIZ Regulating For Pro-Poor Insurance (GIZ RFPI) Asia organised a dialogue on formalisation as part of the Mutual Exchange Forum on Inclusive Insurance Network regular webinar series. The webinar looked at experiences and learnings from the insurance formalisation journey of Inkopdit -a national network of credit unions in Indonesia, and the Philippines Insurance Commissions success in formalising Mutual Benefit Associations in the Philippines.
International experiences in formalisation and in particular in South Africa with funeral parlours was shared by Doubell Chamberlain, Managing Director, from Cenfri. The A2ii’s Hannah Grant provided the closing remarks drawing the audience’s attention to the case studies and guidance available in the A2ii’s Knowledge Hub.
The International Conference on Inclusive Insurance took place from 24-28 October in Kingston, Jamaica, with the A2ii involved in three sessions. For more on the agenda, please see the conference website.
On the morning of 24 October, as a pre-conference workshop, the A2ii and UNCDF jointly held Workshop 1: ‘Training workshop on index insurance best practices for regulators and practitioners in the insurance sector’. Facilitated by Shriya Sundaram, Partnerships coordinator, UNCDF (India), this workshop explored the best-practice guidelines for regulators, insurers and governments and discussed how to create ecosystems for the development of index insurance products. This workshop was based on the joint publication by A2ii and the Pacific Insurance and Climate Adaptation Programme (PICAP) on Index insurance best practices for insurance regulators and practitioners in the Pacific Island countries.
Hannah Grant, Head of the A2ii Secretariat, facilitated the first plenary session of the conference on 25 October, Day 1: ‘Reaching scale in small markets: Regulatory harmonisation in the Caribbean’, C. Samantha Jn. Paul-Samuel, Legislative drafting consultant/Attorney-at-law (Saint Lucia/USA) started with a presentation on the draft harmonised legislative framework for Insurance and Pensions within the Eastern Caribbean Currency Union (ECCU). The 8 islands that make up the ECCU, have a combined population of just 500,000, each with its own regulatory framework, thus requiring companies doing business across the region to seek separate licences and approvals in each country it wishes to do business in. Developing products for low income individuals in each of these is a difficult business case. Developing common single market rules, or recognising neighbour countries insurance laws can ease market access and help providers reach scale. This is especially true for inclusive insurance.
The main goal of this proposed framework is to establish one insurance and pension market across the 8 member territories, with one robust and well-resourced insurance and pension regulator, and a uniform legislation, benchmarked against international standards.
After Paul-Samuel’s presentation, attendants heard from Hugo Lecue, Task Team Leader of Financial Systems, Agence Francaise de Développement (AFD), who shared AFD’s experience with the Conférence Interafricaine des Marchés d’Assurance (CIMA), an example of regional regulatory harmonisation in West Africa.
The presentations were followed by a panel discussion with Rosemary Henry, Vice President of Risk and Compliance at Cuna Caribbean Jamaica Ltd, and Denis Felix, Executive Director of the Grenada Authority for Regulation of Financial Institutions (GARFIN) joining the other speakers on the panel.
The consensus amongst the panellist was that the ECCU Framework would bring significant benefits for reducing cost of cross-border business. However, the challenge remains as to how a single regulator would work in practice.
This framework had been put on pause, but as a result of this session being organised discussions have restarted. Denis Felix expressed his commitment to finalising it and spoke of conversations he had with ECCB governor to get the bill finalised. He also made a ‘call for action’ to industry in ECCU to talk to the supervisor in their jurisdiction to request the Framework to be finalised.
Hannah Grant also spoke at Plenary 4: Insurance and pension for migrant workers: ‘Need and the business case.’ This session was organised by UNCDF and facilitated by Premasis Mukherjee, Remittance and Digital Finance Specialist. This session focused on highlighting the importance of this topic, stressing the great size of migrant population and remittances sent every month across the globe. Hannah Grant’s presentation focused on the main regulatory challenges for migrant insurance (local underwriters licences, restrictions on marketing and selling cross-borders, general definitions, and insurable interests across borders). Therefore, some of the conclusions were that there is a need from supervisors to reflect on other successful experiences (especially microinsurance), collaborate with other jurisdictions to avoid double regulations, and find ways to facilitate greater access to insurance for migrants whilst still ensuring a high level of consumer protection is maintained.
Risk-based Supervision – Supervisory Dialogue | 1 December
Supervisors have been increasingly refining their solvency standards and gradually moving to more risk-based regimes. This year we pick up from where we left off in our past Dialogue on Landscape of Solvency Regimes in emerging markets, where we looked at the spectrum of risk-based capital rules and where a sample of countries across Sub-Sahara Africa, Asia and the Caribbean sit along this spectrum.
Moving to risk-based capital (RBC) approaches is beneficial for all stakeholders in the insurance sector – consumers, industry and the supervisor: it supports the development of the insurance market by providing flexibility, hence encouraging innovation. Risk-based approaches are also more efficient, since capital is allocated more appropriately to risk, reducing the amount of dormant capital. And finally, by giving the supervisor improved measures of financial soundness, comparability and proportionate ladders of intervention, RBC encourages better supervision. However, implementing RBC has substantial resource implications and requires preparation and planning: more risk-based means more complexity, higher requirements for actuaries, skills and technical resources, both within the industry as well as the regulator.
How can supervisors embrace RBS successfully?
To answer this question and add value to Emerging Market and Developing Economy (EMDE) jurisdictions, the supervisory dialogue on 1 December implemented in collaboration with the IAIS focuses on practical considerations and challenges in transitioning to RBS and sharing experiences with jurisdictions who have successfully implemented a risk-based framework.
This webinar will be open to supervisors only and will be taking place at 10:00 CET (with French interpretation), and at 16:00 CET (with Spanish interpretation).
Click here for registration information.
Insurance and the Sustainable Development Goals (SDGs)
The SDG pages include resources on the importance and the role of insurance across nine SDGs: 01 No Poverty, 10 Reduced Inequalities, 02 Zero Hunger, 03 Good Health and Well-being, 05 Gender Equality, 08 Decent Work and Economic Growth, 09 Industry Innovation and Infrastructure, 13 Climate Change and 17 Partnerships for the Goals.
Supervisory KPIs Lexicon
Interactive, searchable directory of KPIs for insurance supervisors across four pillars: prudential soundness, market conduct, insurance market development and the Sustainable Development Goals, with four accompanying handbooks.
Inclusive Insurance Regulations Map
The interactive map incorporates data about regulation and regulation which supports inclusive insurance sourced through A2ii's research, work and interaction with supervisory authorities worldwide.
ICP Self-assessment Tool
The tool is intended to help supervisors assess the level of observance of the Insurance Core Principles (ICPs).