Philippines: Developing Microinsurance Project

Sovereign Project | 41602-022 Status: Closed

Summary

The proposed JFPR project aims to support a sound development of microinsurance as part of microfinance services to protect the poor from numerous contingencies and reduce severe poverty incidence. There are 3 components in the Project: (i) review the current insurance regulations and recommend to improve it to become more conducive to microinsurance develoment (Component A); (ii) enhance capacity of regulators and microinsurance providers through training and mentoring (Component B); and (iii) formulate and conduct a financial literacy program to increase access to microinsurance for the poor (Component C).

Latest Project Documents


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

 
Project Name Developing Microinsurance Project
Project Number 41602-022
Country Philippines
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 9118-PHI: Developing Microinsurance Project
Japan Fund for Poverty Reduction US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Finance - Finance sector development

Gender Equity and Mainstreaming Some gender elements
Description The proposed JFPR project aims to support a sound development of microinsurance as part of microfinance services to protect the poor from numerous contingencies and reduce severe poverty incidence. There are 3 components in the Project: (i) review the current insurance regulations and recommend to improve it to become more conducive to microinsurance develoment (Component A); (ii) enhance capacity of regulators and microinsurance providers through training and mentoring (Component B); and (iii) formulate and conduct a financial literacy program to increase access to microinsurance for the poor (Component C).
Project Rationale and Linkage to Country/Regional Strategy

Grant Development Objectives:

1. The proposed Japan Fund for Poverty Reduction (JFPR) Project (the Project) aims to support the sound development of microinsurance, a microfinance service to protect the poor from unforeseen calamities and reduce severe poverty incidence.

2. Poor households are most vulnerable to such perils as death, illness, and injury of family members who sustain household livelihoods, as the poor lack access to social security systems or commercial insurance. An affordable microinsurance scheme would be a potent tool to guard poor households from uncertainty and future losses. In the Philippines, microinsurance is provided through inhouse operations conducted by mutual benefit associations (MBAs) and cooperatives, or through

partnerships with commercial insurance companies. At the same time, many microinsurance providers face difficulties in sustaining their businesses because they lack actuarial and fund management skills, good governance structures, efficient premium collection and claim processing procedures, and other

skills and structures.

3. The Project will complement ongoing Asian Development Bank support for the Microfinance Development Program 1 and its associated grant assistance 2 by strengthening the capacity of the Philippines' microinsurance sector. The objectives of the Project are as follows:

(i) To help the Government formulate and adopt suitable microinsurance regulations. This

assistance includes reviewing the current policies and regulations, and improving the current

insurance regulatory framework to make it more conducive to microfinance development

(component A).

(ii) To enhance capacities of Government regulators and microinsurance providers through training

and mentoring (component B).

(iii) To increase access by the poor to a range of microinsurance services through financial literacy

activities (component C).

Impact

(i) Improve regulatory framework;

(ii) Strengthen the capacity of government regulators and microfinance providers; and

(iii) Promote financial literacy on microinsurance.

Project Outcome
Description of Outcome

(i) Remove regulatory impediments and policy distortions to promote market efficiencies and increase outreach of services to the poor at competitive prices.

(ii) Build MFIs that can provide efficient and cost-effective retail delivery of services to the poor.

(iii) Strengthen regulatory and supervisory capacities and authority for a sound microfinance sector.

(iv) Increase financial literacy and consumer protecion for the poor.

Progress Toward Outcome

Laws, rules and regulations and issuances affecting microinsurance were reviewed and taken into

consideration in the final regulatory framework. TWG meetings and Regional consultations with stakeholders were conducted. Regulatory Framework finalized and submitted to the Steering Committee on December 11, 2009 and, formally signed and launched on January 29, 2010.

Circulars for microinsurance were identified and finalized. Two circulars (IMC 1 2010 and

JMC 1 2010) were signed and launched on January 29, 2010 while another circular (JMC 2

2010) was signed on June 25, 2010.Regulatory Framework on

Microinsurance launched on January 29, 2010.

Roadshows (6) on circulars on formalization of microinsurance

activities were conducted in 2010. TWG meetings conducted to draft, formulate, and finalize the

Performance Standards. Circular letter on the adoption and implementation of the Performance Standards was drafted. Four (4) consultations with industry players were conducted

in 2010. Draft Circular Letter on Performance Standards was approved by the Steering Committee on December 2010. Said circular was also endorsed for signing by the Insurance Commissioner. Technical Working Group meetings on the Development of the Roadmap to Financial Literacy on Microinsurance conducted. Public consultations (6) conducted in 2010. Roadmap to Financial Literacy on Microinsurance finalized and approved by the members of the Steering Committee.In support of the project objectives and the various activities conducted, the project in partnership with the Insurance Commission, the National Credit Council- Department of Finance and the German International Cooperation (GIZ) also conducted a microinsurance awards night for microinsurance providers on January 30, 2012. The event recognized insurance providers who have already sold microinsurance policies as of December, 2011.

To culminate the activities of the project, a National Conference on Microinsurance was also held on September 12, 2012. The Conference showcased the various initiatives undertaken under the project, milestones achieved and the other activities carried out by the other stakeholders (e.g. insurance providers, delivery channels) that are contributory to the current state of microinsurance in the country. The Conference also identified remaining issues and gaps that need to be addressed for the continued growth and development of the microinsurance industry.

Implementation Progress
Description of Project Outputs

(i) Formulation of draft microinsurance regulations, appropriate policy and regulatory measures, and guidelines and standards for soundness and safety in the provision of microinsurance services.

(ii) Training sessions to be conducted by NCC and the Insurance Commission for insurance trainers and insurance providers.

(iii) Increased number of poor households benefiting from micro-insurance.

Status of Implementation Progress (Outputs, Activities, and Issues)

Component A:

After reviewing laws, rules and regulations, formulation and drafting of the policy and regulatory framework for microinsurance were undertaken. After TWG meetings and regional consultations with stakeholders were conducted, the draft was finalized and submitted to the Steering Committee in December 2009 and formally signed and launched in January 2010. Related circulars for formalization of microinsurance were also identified and finalized. Two circulars were signed and launched in January 2010 while another circular was signed in June 2010. Reflecting the feedback from public hearings on the regulatory framework, it was decided to extend the transition period from January 2011 to December 2011 by a new circular in March 2011. TWG meetings along with consultation workshops were also conducted to draft, formulate and finalize the performance standards for microinsurance. Final draft of the circular was presented to and approved by the Steering Committee in December 2010. It was signed by the Insurance Commission in February 2011. Most of the activities under this component have been completed by March 2011.

Component B:

Upon adoption of the performance standards, initial TWG meetings to discuss the content of training on the performance standards were conducted during the first quarter of 2011.

Component C:

TWG meetings on the Development of the Roadmap to Financial Literacy on Microinsurance with six public consultations were conducted in 2010. Roadmap to Financial Literacy on Microinsurance has been finalized and approved by the members of the Steering Committee. TWG meetings to discuss the various training modules and advocacy materials for financial literacy were conducted during the first quarter of 2011.

Last review mission was conducted in Baguio City during July 2012.

The implementation period has been extended until September 2012 mainly for the purpose of covering National Financial Literacy Campaign under the Component C with parallel financing from GIZ. The EA organized with IAs the National Microinsurance Conference as a JFPR closing seminar on September 12, 2012.

The JFPR project activities has been physically closed September 2012 and to be financially closed within year 2013.

Geographical Location Nationwide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

Executing Agency

1. The National Credit Council (NCC) in the Department of Finance (DOF) will be the Executing Agency (EA) of the Japan Fund for Poverty Reduction (JFPR) Project.

Implementing Agency

2. The implementing agencies are NCC, Insurance Commission, Cooperative Development Authority (CDA), and National Anti-Poverty Commission (NAPC). The day-to-day activities will be undertaken by the project implementation unit (PIU) to be represented by NCC, under the supervision of the project implementation committee (PIC) which will comprise NCC, Insurance Commission, CDA, and NAPC.

Business Opportunities
Consulting Services

NATIONAL Consultants:

(i) Microfinance Policy Specialist (16 person-months)

(ii) Finance/Administrative Expert (16 person-months)

(iii) Training Modules Experts (66 mandays each)

(iv) Research Advocacy Specialist (12 person-months)

Responsible ADB Officer Hiroyuki Aoki
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
National Credit Council
Gil S. Beltran
gbeltran@dof.gov.ph
4th Floor, DOF Building, BSP Complex, Roxas Boulevard, Malate, Manila, Philippines
Department of Finance
DOF Building
Bangko Sentral ng Pilipinas Complex
Roxas Blvd., Manila, Philippines
Timetable
Concept Clearance 30 Jul 2007
Fact Finding 31 Jul 2007 to 08 Aug 2007
MRM -
Approval 15 Feb 2008
Last Review Mission -
PDS Creation Date 31 Mar 2009
Last PDS Update 20 Mar 2013

Grant 9118-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Feb 2008 17 Mar 2008 17 Mar 2008 31 Mar 2012 30 Sep 2012 26 Jul 2013
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1.00 Cumulative Contract Awards
ADB 0.00 15 Feb 2008 0.00 0.72 72%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 1.00 15 Feb 2008 0.00 0.72 72%

Safeguard Documents

See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents

See also: Independent Evaluation

None currently available.

Related Publications


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.