Actualidad Peru

Microinsurance: protecting entrepreneurs

Bill for the Regulation of Microinsurance Policies

The Banking, Insurance and Pension-Fund Supervisor (SBS) has published this bill to improve the current definition of "microinsurance" contained in the Microinsurance Policy Regulation approved under SBS Resolution 14283/2009. The new definition is "insurance accessible to low-income individuals and small traders to cover personal and/or material risks to which they may be subject, by proportional payments of the premium in line with the risks covered by the policy (...)"

The bill makes the definition of the sales channels more flexible, in order to increase the availability of microinsurance products. It eliminates the requirement to provide a list of establishments where microinsurance policies can be taken out.

Sale of policies

The main changes proposed by the SBS for the sales and marketing of microinsurance products are: *

(i) The companies may use remote sales channels to promote, offer and sell microinsurance.  In such cases, the person taking out the insurance or the insured party must be informed of their right to change their mind and retract the microinsurance contract under the legally allowed conditions.

(ii) Companies must implement policies and procedures to select their sales agents.

(iii) Microinsurance can be sold over ATMs belonging to correspondents in the financial system and e-money issuers.

(iv) Training must be given to sales agents every year, or whenever they start to sell a new microinsurance product.

(v) The deadline for reporting the problem and payment of indemnity will be shorter than for conventional insurance.

(vi) Companies are given 90 days once the Bill is enacted, to bring their microinsurance policies into compliance.