ADB offers tech aid for RP microinsurance projects

MANILA, Philippines - The Asian Development Bank (ADB) and German development assistance agency GTZ are extending assistance to the government for the development of microinsurance programs, which target the poor as main beneficiaries. Eiichi Sasaki, ADB financial sector specialist, said the bank would provide a $1 million technical assistance for the conduct of worshops and consultations aimed at drafting regulations covering the microinsurance sector. "We are having discussions. The government is exerting its efforts to help firms expand their reach so new regulations conducive to microinsurance development are necessary," Mr. Sasaki told BusinessWorld. Dante Portula, GTZ small-and-medium enterprises finance adviser, said the German government has approved in principle to provide support to the development of microinsurance in the country and an appraisal mission came in December of last year to find out how GTZ could provide support to the government. "GTZ is already very active in the topic of microinsurance because it is a member of the working group on microinsurance and the CGAP (Consultative Group to Assist the Poor), a World Bank project that conducts research and studies that concern advocacy on microfinance," Mr. Portula said in an interview. He added that a project proposal submitted two weeks ago to the German government is awaiting approval and components of the project would still be discussed. "$3 million is our allotment for this," he said. "Maybe by January next year we have a kick-off of the project." Microinsurance protects the poor against death, illness, natural calamities and loss of property. Premiums are more affordable, being matched to the poor’s ability to pay. A study on how microinsurance has fared in the Philippines showed that there is a lack of coordination among regulators of firms offering life and non-life insurance products. The Insurance Commission, for instance, does not regulate pre-need and health care firms, which are regulated by the Securities and Exchange Commission and Health department, respectively. One recommendation is to come up with uniform regulations covering microinsurance players. — Louella D. Desiderio, BusinessWorld