CARD MBA: The Philippines

The Center for Agriculture and Rural Development Mutual Benefit Association (CARD MBA) offers life and disability insurance. CARD operates in an environment where there is helpful legislation for mutual benefit associations. This paper presents the following key lessons to be learnt from CARD MBA:

• When the board of an insurance company is comprised of only members or policy holders who have no experience in corporate governance, it is necessary to have an experienced advisory group that can guide the board. Such an advisory committee has been critical to the success of CARD MBA;
• Insurance professionals are required to develop and manage insurance products;
• MBA field-staff are selected from the organization's policy-holders for one-year terms. The benefits of this strategy are:
  • Short term limits the ability of the coordinators to get too clever;
  • It builds a large pool of members that have experience working with insurance products;
  • It generates more knowledgeable policy holders, improving their role in MBA governance.
• When insurance products are offered to a member's family, the insurer has no idea about the health of the rest of the family. People could join knowing that a family member was gravely ill and they could therefore make a quick claim. The contestability clause introduced by CARD has had a positive effect on curbing such adverse selection;
• Micro insurance product can be developed and implemented with limited donor funding;
• New product development requires a clear understanding of demand and an understanding of the impact that the product has on the institution.