The South Africa Treasury and Financial Services Board recently announced it will introduce legislation with the intention of expanding the reach of insurance products to the low-income population. The legislation will be structured to encourage informal insurance operators to enter the regulatory system, however, enforcement will strengthen for the informal insurance operators which do not become licensed microinsurers. The microinsurers that become licensed will be subject to lower capital requirements and reduced regulation.

The new legislative framework will support the provision of low-cost standard insurance products similar in nature to South Africa’s Mzansi bank account, which was developed by South Africa’s Financial Sector Charter with the intent of meeting the needs of the unbanked population.

By Jennifer Shevock, Research Associate

About the Financial Services Board (South Africa):

The Financial Services Board (South Africa) is an independent institution established to oversee the South African non-banking financial services industry.  The Financial Services Board supervises and regulates insurers, intermediaries, retirement funds, unit trust schemes, management companies and financial markets.

Sources and Additional Resources:

“South Africa: ‘Mzansi-Type’ Insurance to Be Introduced” August 19, 2010. http://allafrica.com/stories/201008190866.html

Mzansi Account: http://en.wikipedia.org/wiki/Mzansi_Account

MicroCapital Universe: Financial Services Board (South Africa): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Financial+Services+Board

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