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Toward an efficient and sustainable Microinsurance market: The regulatory perspective

Author

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  • Ahsan, Syed M.
  • Barua, Shubhasish
  • Tax, Jaimie

Abstract

While both microcredit and microinsurance products in the developing world have essentially emerged in a regulatory vacuum, the general consensus appears to be that self-regulation may have thus far served the global microcredit industry adequately. The same premise is likely to be false when it comes to microinsurance since diffusion of the essence of insurance among the poor has proven non-trivial. The regulatory framework therefore has to target multiple goals such as to foster market innovations (in terms of product design and the institutional delivery mechanism), to protect the policy holder (i.e., achieving “cost efficiency” and “sustainability”) and at the same time to ensure that insurance services remain inclusive and compatible with the needs of the poor. Accomplishing these goals within a single regulatory framework requires a fine balance. This paper deliberates on how to craft a set of regulatory statutes that would be relevant for the microinsurance industry in consonance with these goals.

Suggested Citation

  • Ahsan, Syed M. & Barua, Shubhasish & Tax, Jaimie, 2010. "Toward an efficient and sustainable Microinsurance market: The regulatory perspective," MPRA Paper 35816, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:35816
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    References listed on IDEAS

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    1. Xavier Giné & Robert Townsend & James Vickery, 2008. "Patterns of Rainfall Insurance Participation in Rural India," The World Bank Economic Review, World Bank, vol. 22(3), pages 539-566, October.
    2. Syed M. Ahsan, 2010. "Microinsurance, Poverty & Vulnerability: A Concept Paper," Working Papers 1, Institute of Microfinance (InM).
    3. David Mark Dror, 2018. "Health Insurance Benefit Packages Prioritized by Low-Income Clients in India: Three Criteria to Estimate Effectiveness of Choice," World Scientific Book Chapters, in: Financing Micro Health Insurance Theory, Methods and Evidence, chapter 13, pages 253-270, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Ahsan, Syed M. & Khalily, M. A. Baqui & Hamid, Syed A. & Barua , Shubhasish & Barua, Suborna, 2013. "The Microinsurance Market in Bangladesh: An Analytical Overview," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 36(1), pages 1-54, March.

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    More about this item

    Keywords

    Microinsurance; poverty & vulnerability; prudential regulation; reporting standards;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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