Proportionate Regulatory Frameworks in Inclusive Insurance: Lessons from a Decade of Microinsurance Regulation

It is slightly over a decade since the first microinsurance regulations were introduced in India in 2005. In this publication, the authors look back at what supervisory approaches have been undertaken since then, and draw lessons from the past. The booklet examines ongoing and emerging market trends and challenges that insurance supervisors confront, particularly with regard to formalization, mass distribution and digital technology. Finally, it highlights the areas where supervisory capacity-building will be highly important as inclusive insurance markets worldwide continue to innovate and grow.

Key takeaways from research over the past decade suggest that it is highly critical for supervisors to:

• Understand the unique market context of a jurisdiction prior to developing the microinsurance regulatory framework;
• Take into account the broader legal and regulatory context within which microinsurance regulations are issued;
• Pre-empt and avoid unintended consequences that might arise from a microinsurance regulatory framework;
• Coordinate and cooperate with other authorities that are involved in supervising the provision or distribution of insurance and insurance-related products;
• Adopt a structured, evidence-based and properly sequenced process to developing and implementing the microinsurance regulatory framework;
• Apply a test-and-learn approach in developing and implementing microinsurance regulations, while remaining proactive and flexible;
• Undertake national and regional capacity-building in collaboration with peer-supervisors from other countries.