Proposed Microinsurance To Benefit The Most Vulnerable

The Government is seeking to ensure that wide-ranging legislative and product provisions being targeted for implementation and delivery under the proposed Microinsurance Bill redound to the benefit of all Jamaicans, especially the most vulnerable.

Details of these and the overall policy framework were outlined by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, during the Insurance Association of Jamaica (IAJ) recent semi-virtual microinsurance conference, which was held at The Jamaica Pegasus hotel in Kew Kingston under the theme ‘Microinsurance – The Jamaican Perspective’.

Key among the provisions, Dr. Clarke said, is the fit and proper requirements for potential service providers, who “have to be registered”.

Microinsurance looks to assist low-income persons by offering insurance plans tailored to their needs.

The Minister said in addition to defining microinsurance and specifying the relevant products to be offered, the legislation will require that these offerings have stipulated minimum terms and conditions and that all be administered under formal contractual arrangements.

“It will, very importantly, define the term of microinsurance products and [that timeline] will be for a maximum of one year. So though, obviously, they can be renewed, you [won’t be able to] lock somebody in indefinitely to be paying premiums; they will have the opportunity to renew [policies] on an annual basis,” the Minister further indicated.

Dr. Clarke maintained that this will be crucial to properly service the market “where incomes are [in a number of instances] low and there are a lot of demands on income”.

Additionally, he said the legislation will require that claims be resolved and paid out within five days, “so that the experience of the insured is such that the microinsurance is seen as one that adds value”.

The Minister advised that work on the Bill’s development is advanced, adding that it is expected to be tabled in Parliament before the end of the 2021/22 fiscal year, on March 31, 2022.

Dr. Clarke further said he anticipates the legislation’s passage during the 2022/23 fiscal year, which starts on April 1, 2022.

“The Ministry of Finance and the Public Service has been working with the Office of the Parliamentary Counsel and the Attorney General’s Chambers to bring this legislation to life. It is, therefore, my expectation that microinsurance will become a reality in Jamaica at some point in the next fiscal year,” he added.

Dr. Clarke encouraged insurance industry service providers to take the necessary steps to ensure the delivery of seamless quality service to the target population when policy implementation commences.

“You’re going to have to make sure that people are comfortable to come into your offices. Your locations are going to have to be such that they are accessible. By the time [the Bill] is passed, it is important that you are ready [so] that members of the low-income community [in particular] feel confident purchasing your products,” he added, while emphasising the importance of facilitating digital interaction with clients.

Dr. Clarke said development and implementation of a microinsurance policy framework forms part of the Government’s thrust to broaden the base of the economy and deepen its inclusiveness by making insurance accessible to all Jamaicans.

“The Government is serious about inclusive economic recovery. Therefore, we are taking steps to enhance the policy environment and the legislative framework to bring hundreds of thousands of the uninsured into the formal financial services space where they, too, can have access to insurance products,” he added.