1. Deputy Executive Officer: Insurance Financial Services Board
Accelerating financial inclusion through regulation – a case for harmonization of Insurance Regulation
Jonathan Dixon
Deputy Executive Officer: Insurance
Financial Services Board
South Africa
23 May 2017

2. Inclusive insurance “matters”…
What is our shared goal?
Inclusive insurance “matters”…
Insurance protects poor households and microenterprises from falling back into cycle of poverty
Insurance mobilizes long-term domestic savings for finance of infrastructure and housing and contributes to capital market development
Insurance sustains the efforts of other policy agendas such as food security, agricultural protection or private sector development
Insurance market development is important
for broader socioeconomic development

3. Effective regulation and supervision matters…
What can supervisors do?
Effective regulation and supervision matters…
Builds
confidence
Information
asymmetry
Requires
confidence
Insurance is characterised by a high level of asymmetry of information between providers and consumers and requires payment for the service long before the customer has an opportunity to experience its value
As a result, this “business of promises” requires a high level of consumer confidence and trust in the industry if markets are to develop and grow
Effective regulation and supervision are essential to build consumer confidence and trust and help ensure financial stability

4. What is “effective” regulation and supervision?
What can supervisors do?
“Proportionate” to the nature, scale and complexity of
insurance business being conducted – enables market
development while protecting more vulnerable
consumers
What is “effective” regulation and supervision?
Developed in close consultation with industry with
adaptations made as more knowledge and
experience gained
Forward-looking so as to allow for future innovations –
particularly as new players become involved and more
innovative products and distribution channels are
developed
Supervisors in Africa are making big efforts to implement proportionate regulation – not easy!

5. A case for harmonization?
Establish common expectations of how insurers should be run and customers should be treated
Potential benefits
Leverage combined expertise between jurisdictions
Manage the risk of regulatory arbitrage and support industry growth on a cross-border basis
Enables more effective supervisory capacity building and technical assistance
Facilitate supervision through the collection of consistent data, benchmarks, international comparisons and identification of best practices over time

6. What guidance?
International Association of Insurance Supervisors (IAIS)
Harmonised
approach
Application
paper
ICPs
IAIS/A2ii
papers
Supports globally a more ‘harmonised approach’ based on international best practices
Application Paper on Regulation and Supervision supporting Inclusive Insurance Markets (2012)
IAIS Insurance Core Principles (ICPs) deal with all key elements of regulation & supervision
Additional guidance available from IAIS and A2ii

7. Regional engagement and coordination
What guidance?
Regional engagement IAIS/A2ii
Regional engagement and coordination
Maximise coordination with regional forums; Develop sub-regional implementation plans; Enhance supervisory cooperation and information exchange
Implementation
Work towards full ICP observance and regional engagement; Action planning around regional needs
Strengthen capacity
Organise capacity building through A2ii and other partners
IAIS Sub-Sahara Africa members expressed strong support for the development of a regional implementation approach that enhances regional harmonization of supervisory practices and facilitates financial inclusion - building on existing work being undertaken in the region
In line with the IAIS’ Coordinated Implementation Framework and as the key implementing partner to the IAIS, A2ii wants
To support the implementation of sound regulatory and supervisory frameworks consistent with international insurance standards in the region
to strengthen the capacity and understanding of insurance supervisors in SSA to facilitate their role in expanding access to, and usage of, insurance for the low-income and other excluded populations.
IAIS regional members agreed to use the current momentum to consider a process around a regional implementation approach of IAIS standards for the region, facilitated by IAIS and A2ii, focused on specific supervisory priorities – identified by a bottom-up approach
Supporting harmonization at a regional level

8. CISNA Microinsurance Forum
Example
CISNA Microinsurance Forum
Promote the harmonisation of microinsurance regulations in the
SADC region and to build capacity to implement those regulations
Develop clear policies and procedures for effective supervision to
support the expansion of inclusive insurance
Coordinate efforts to grow more inclusive insurance markets
Support members to facilitate the development of insurance markets
Guidance note: guidance for a harmonised regulatory framework in SADC for inclusive insurance, based on IAIS Application Paper
Common template: data collection for inclusive insurance business in SADC and common ratios for analysing performance

9. Thanks for your attention!
Contact…
Thanks for your attention!
Please get in touch!
A2ii contacts
SSA regional coordinator: Janice Angove:
Head of Secretariat: Hannah Grant:
IAIS contact
IAIS Secretariat: Conor Donaldson: