Ghana, Pakistan and the Philippines issue new sets of mobile insurance regulation

Regulation in itself cannot make an insurance market innovate but a good regulatory framework paired with a supportive supervisory approach is a vital enabler. Ghana, Pakistan and the Philippines recently issued new sets of regulation fostering innovations in digitally-supported insurance business. Here’s a digest.

Mobile Insurance Regulation Ghana (November 2017)

National Insurance Commission Ghana issued “Market conduct (M-Insurance) Rules” for mobile insurance on 1st of November, 2017 under the Powers of the Insurance Act (2006). 

The Rules apply to licensed insurers, brokers or agents that rely on mobile-based distribution, and to all that are distributing insurance contracts through a platform-only (this is where the Mobile Network Operator (MNO) provides an insurer with access to its mobile platform for distribution but does not undertake underwriting) as a regulated activity. 

The Rules define “branded product”, “hybrid product”, “e-money” and “mobile insurance” or “m-insurance.

Under the definition of M-insurance MNOs can act in various functions and mobile insurance includes, but is not limited to, an arrangement under which

(a) the MNO acts as an insurance agent for the licensed insurer,

(b) the MNO enters into a group insurance contract, as master policyholder, with the intention of providing insurance coverage to its customers, as members,

(c) the MNO acts a platform-only provider.


Additionally, the Rules stipulate that:

  • During product approval, it is necessary to submit information on branding, the partners in the mobile insurance arrangement, access to technology by the MNO, and the service level agreement.
  • Service level agreements need to: include a mechanism for dispute resolution between the parties;  ensure confidentiality of client information,  include provision for data handling and transmission and they need to enable the insurer to access all information relevant to the insurance contract.

The November 2017 Rules will apply jointly with the 2013 Rules when a mobile insurance contract is approved as an microinsurance contract.

Read more here.


Mobile Insurance Regulation in Pakistan (December 2017)

The Securities and Exchange Commission of Pakistan issued the “Securities and Exchange Commission (SEC) Directive for the Corporate Insurance Agents (excluding Banks) and Technology Based Distribution Channels, 2017” on 4th December 2017 (SRO 1236 (I)/2017. The Directive comes into force on 31st March 2018 but is also valid for existing agency agreements, and includes family and general takaful operators. 

The directive defines   “technology based distribution channels” as insurance channels involving technology including, but not limited to mobile phone, internet, telephone etc. whether through involvement of corporate insurance agents or otherwise. The technology provider may or may not be working in the capacity of corporate insurance agent”. 

Part I of the Directive covers the requirements relating to corporate insurance agents whereas Part II covers sale through technology-based distribution channels.  

As it is set out in the Directive, the insurer is to provide agency agreements to the Commission. These include:

an agreement specifying the   roles and responsibilities of all the parties involved,
a termination agreement (which sets out what happens if agreement is terminated), and
the certification process, to ascertain that every corporate insurance agent will ensure that all the specified persons are adequately trained and possess sound knowledge of the insurance products they would market, and have undergone the process of the certification

Other sections include provisions on certification for corporate insurance agents, on the premium collection, marketing and sales material, conflict of interest and commission claw-back in the case of mis-selling.

The SEC Directive also regulates the commission for corporate insurance agents without defining the maximum payable amount. Instead, the commission is tied to the performance criteria set out in the agency agreement between the insurance agent and the insurer. Commission is allowed only on premiums already received, not on future ones. 

When it comes to the sales process, SEC sets out a requirement for insurance needs analysis of the prospective policyholder including a requirement to submit product information. The Commission will review corporate insurance agents’ products, including premium, commission and claims data.

For cases where MNOs (as agents or not) or the internet are involved, the Directive stipulates:

storage and safety of data (the MNO or broker may store data, but it is the responsibility of the insurer to ensure the safety of policyholder data),
a file and use procedure for such products,
communication of terms and conditions through mobile and internet (key facts), and
reduced due diligence requirements for annual premiums up to Rs. 50,000 per year (approximately EUR 370).

In addition to the SECP Rule, the National Database and Registration Authority (NADRA) has agreed to reduce the verification cost for microinsurance policies sold through mobile and other digital modes (reduced due diligence for smaller premium amounts). 

Read more here.


Mobile Insurance Regulation in the Philippines (January 2018)

The National Insurance Commission (IC) Philippines issued Circular (CL 2018-07) on 16th January 2018 concerning the use of mobile applications for the distribution of insurance products.

The new circular amends CL 2014-47, which regulates electronic commerce of insurance products, providing the framework for the distribution of insurance products through the internet.

CL 2018-07 provides an enhanced framework for the use of mobile phones as a distribution channel for insurance products. The Commission approves mobile applications, and only those products that are approved and comply with all insurance rules shall be distributed.

The mobile applications could either come pre-installed on a mobile device, as items in the subscriber identification module (SIM) menu of a mobile network carrier or downloadable via major digital platforms, such as Apple Store, Google Play or Microsoft Windows Marketplace.

The apps’ geographical coverage is limited to the territory of the Philippines.

The new regulation also provides for a more flexible mode of payment for policyholders, like airtime deduction, billing to the postpaid plan, electronic wallet and others.

Read more here.