Session 7: Breakout Group on Insurance: Progress in the Region and Policy Challenges Ahead Craig Thorburn, The World Bank Regional Seminar on NBFIs in Latin America December 4-6 Santiago, Chile

Observations on Status Considerable scope for development across the region compared to other regions. Life sector tends to lag behind non life sector. Liberalization in progress in most jurisdictions, some for longer periods than others.

Externalities and Preconditions Sector progress depends on preconditions. Improved growth in recent years has come with improved economic stability. Political instability in some countries has had an impact which will limit opportunities for the sector in those countries in the short term. Continued (or restored) certainty of economic outlook required to promote long term savings environment. International reinsurance market and pressures on home operations of international firms will also influence local operations.

Market Tiers Analysis suggests a two tier regional grouping.

Opportunities Identified Regulatory upgrades in a changing environment, constant vigilance In an increasingly global market, compatibility with IAIS international standards and codes Particular emphasis on Review and supervision of technical provisions; Solvency margin regime in an environment of liberalizing product controls; Reinsurance; Risk management, particularly ALM; and Supervision without over regulation.

Opportunities II Enforcement – more consistent application Improvement of the region against world wide benchmarks – continued liberalization steps Improvement within the region between groupings Larger markets can / should assist smaller markets Cooperation and coordination at a regional and international level re-emphasized Liberalized approach to distribution channels especially banc assurance, retail associations and internet distribution Non life insurance – emphasis in opportunity presented by compulsory classes Liberalization to increase efficiency and coverage Social objectives can be enhanced