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Financial Inclusion in Insurance is on top of the IAIS’ agenda

17.09.2012Peter van den Broeke

The International Association of Insurance Supervisors (IAIS) is the international standard setter for insurance and issues principles, standards and guidance which provide a globally accepted framework for the regulation and supervision of the insurance sector.  It is committed to improve access to finance by promoting effective regulatory, supervisory and policy approaches and elaborating standards on financial access. The recent decision by its Executive Committee (ExCo) to set-up the new Financial Inclusion Subcommittee marks a new stage in its work to promote inclusive insurance.

Already since 2006, the IAIS has been addressing regulatory and supervisory issues for promoting access to insurance. In June 2007, the IAIS published its Issues paper on Regulation and Supervision of Microinsurance. This paper was followed in October 2010 by the release of the Issues Paper on the Regulation and Supervision of Mutuals, Cooperatives and other Community-based Organisations in increasing access to Insurance Markets.

In addition, in a unique public-private partnership with the Microinsurance Network (MIN) the IAIS set-up the IAIS–Microinsurance Network Joint Working Group (JWG), that is operating for almost a decade now. It includes representatives from the Microinsurance Network (MIN), donors and other development agencies, insurance and financial development experts. The JWG supports the development of regulatory and supervisory frameworks focused on policies conducive to protecting policyholders and supporting inclusive insurance markets especially for the low-income segments. The JWG's work plan contributes to strengthening the insurance financial system and fosters financial inclusion to promote economic growth.

The IAIS took its engagement in this area further by co-founding as charter sponsor the Access to Insurance Initiative (A2ii), the global partnership that supports insurance supervisors in developing a reform path in their jurisdiction so as to increase access to insurance markets for the low-income population.

The establishment of the Financial Inclusion Subcommittee (FISc) follows ExCo’s recognition that the IAIS engagement in financial inclusion issues (especially microinsurance) responds directly to the needs of many IAIS Members and to the mandate from the G20 for standard-setting bodies to engage in financial inclusion efforts. IAIS engagement also reflects the addition of financial inclusion in Mexico’s priorities under its current G20 leadership. The new FISc will address the application of insurance supervisory standards in specific circumstances - with a particular focus on emerging markets and that with regard to standard-setting. The FISc will also have continuing responsibility for the development of the applications paper on financial inclusion.

The FISc work plan will include the finalization of the Application Paper on Regulation and Supervision supporting Inclusive Insurance Markets, an engagement with the Access to Insurance Initiative (A2ii) to develop training materials and a toolkit for the application paper, and the development of an issues paper on market conduct, distribution issues and consumer protection relating to financial inclusion. The Paper proposes pathways for supervisors to advance financial inclusion in their jurisdiction, e.g. by requiring that insurance providers should be formalized, or by facilitating industry innovations. It also provides examples of how proportionality can be implemented in practice, and discusses roles and responsibilities of authorities and other stakeholders. The IAIS guidance will be discussed by specialists and supervisors from all over the world. Emerging lessons from A2ii country engagements across the globe will provide insights on how supervisors have started to implement regulatory reforms.

Part of the FISc mandate is to reach out and engage with our members active in inclusive insurance markets to provide adequate support in their efforts to establish and maintain sound regulation and supervision. For that purpose the IAIS-MIN Joint Working Group is scheduled to meet on 5 November 2012 in Tanzania. In addition, on 6 November 2012 a Policy seminar for supervisors will be organized. Both meetings will take place before the 8th International Microinsurance Conference on 6-8 November 2012 in Tanzania organized by the Munich Re Foundation, the Microinsurance Network and several other partners, such as Making Finance Work for Africa (MFW4A).

Peter van den Broeke is principal administrator with the Secretariat of the International Association of Insurance Supervisors (IAIS). He is responsible for IAIS work in the areas of supervisory cooperation – including the IAIS Multilateral Memorandum of Understanding and functioning of Supervisory Colleges – and financial inclusion as well as for supporting the IAIS Executive Committee.

He started his career in financial supervision with the insurance and pension’s supervisor and the Central Bank of the Netherlands (Nederlandsche Bank). His working experience of more than 20 years with the supervisory authority covers legal affairs, operational (prudential) supervision and anti-fraud / financial integrity as well as policy advisory work and international affairs. He was several years head of a department for insurance supervision and Chair of IAIS working groups on insurance fraud and on corporate governance. He was also appointed as deputy judge adjudicating in cases of economic crime and financial regulation.

After leaving the supervisory authority at the end of 2007 Peter worked as an independent consultant and trainer in financial regulations, compliance and integrity. Internationally he provided technical assistance in various developing countries for the IMF and World Bank.

Peter has given various presentations and has produced several publications on financial regulations, supervision and compliance.

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