MICROCAPITAL BRIEF: South Africa’s National Treasury Releases Policy Document, “The South African Microinsurance Regulatory Framework,” to Address Access to Insurance, Consumer Protection for Low-Income Households

In a recent press release, the National Treasury of the Republic of South Africa, the body responsible for managing government finances, released a policy document titled, “The South African Microinsurance Regulatory Framework,” to address the “challenges to improve access to insurance and consumer protection for the lower income families in the country” [1]. The policy document builds on the National Treasury’s 2008 discussion paper “The future of micro-insurance regulation in South Africa,” is expected to result in either the amendment of the existing insurance legislation or the creation of a stand-alone Microinsurance Act.

According to the National Treasury, elements of the insurance market that require reform are the promotion of better access to affordable insurance, better matching of insurance products to the needs of the low-income consumers and strengthening consumer protection. Consequently, some of the key objectives that the policy document intends to achieve are: extending access to “good-value” formal insurance products appropriate for the needs of low-income households; lower barriers to entry to encourage broader participation in the insurance market to promote competition among providers; enhanced consumer protection through consumer education and “prudential and business conduct regulation”; and the facilitation of more effective supervision of the insurance market as a whole.

The National Treasury and Financial Services Board intend to develop the microinsurance legislation for comment by 2012, and for presentation to Parliament by 2013.

By Nisha Koul, Research Associate

Sources and Additional Resources:

[1] Press release, National Treasury, Republic of South Africa, http://www.treasury.gov.za/comm_media/press/2011/2011072801.pdf

Policy Document, National Treasury, Republic of South Africa, “The South African Microinsurance Regulatory Framework.” http://www.treasury.gov.za/publications/other/MicroinsuranceRegulatoryFramework/Policy%20Document%20Micro%20Insurance.pdf

Discussion paper, National Treasury, Republic of South Africa, “The Future of Micro-insurance Regulation in South Africa,” http://www.treasury.gov.za/public%20comments/The%20Future%20of%20Micro-insurance%20Regulation%20in%20South%20Africa.pdf

MicroCapital.org story, March 22, 2011, “MICROCAPITAL BRIEF: Financial Services Board (FSB) of South Africa Launching “Treat Customers Fairly” (TCF) Framework in Effort to Improve Financial Inclusion, Microinsurance Framework Also in Works,” https://www.microcapital.org/microcapital-brief-financial-services-board-fsb-of-south-africa-launches-new-microinsurance-framework-in-effort-to-improve-financial-inclusion/

MicroCapital.org story, January 25, 2011, “MICROCAPITAL BRIEF: Old Mutual South Africa (OMSA) Partners With Shoprite to Launch Pay-When-You-Can Funeral Microinsurance,” https://www.microcapital.org/microcapital-brief-old-mutual-south-africa-omsa-partners-with-shoprite-to-launch-pay-when-you-can-funeral-microinsurance/

MicroCapital.org story, May 16, 2011, “MICROCAPITAL BRIEF: Microinsurance Network Releases Coverage Of “Microinsurance Debate on Public-Private Partnership (PPP),” https://www.microcapital.org/microcapital-brief-microinsurance-network-releases-coverage-of-%E2%80%9Cmicroinsurance-debate-on-public-private-partnership-ppp%E2%80%9D-2/

MicroCapital.org story, March 30, 2011, “MICROFINANCE PAPER WRAP-UP: Making Insurance Markets Work for the Poor: Microinsurance Policy, Regulation and Supervision – India Case Study; by Sanjay Sinha and Swetan Sagar; Published by CGAP (Consultative Group to Assist the Poor) Working Group on Microinsurance,” https://www.microcapital.org/microfinance-paper-wrap-up-making-insurance-markets-work-for-the-poor-microinsurance-policy-regulation-and-supervision-%E2%80%93-india-case-study-by-sanjay-sinha-and-swetan-sagar-published-by-cga/

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