As noted in previous sections, these MBAs require lower capital requirements compared to non-microinsurance MBAs. These MBAs, however, will be subjected to specific performance standards.61 5.2.4. Regulation defining micro-insurance provided basis for commercial insurance companies to design appropriate insurance products for the poor. Establishing a maximum limit for micro-insurance premium payments provided insurance providers a benchmark in designing and creating innovative insurance products that can be affordable to the poor. The issuance of an IC circular defining micro-insurance prompted about 6 commercial insurance companies to design insurance products that fall within the definition of micro-insurance both in terms of premium payments and in terms of benefits. While there is no specific information yet as to whether the companies were able to market the products effectively, it is worth noting that the regulation paved the way for commercial insurance companies to consider this new market and design appropriate products. 5.2.5. Absence of regulation for cooperatives and the need for risk protection among cooperative members resulted in the implementation of informal microinsurance schemes. The lack of regulation for cooperatives especially those engaged in savings and credit operations has resulted in provision of informal and unregulated micro-insurance products to their members. Unlike the banks that are regulated by the Bangko Sentral ng Pilipinas, cooperatives (especially those engaged in savings and credit operations) are not currently regulated nor supervised by the Cooperative Development Authority (CDA). In view of this, informal insurance schemes and arrangements have mushroomed among cooperatives. While under the Cooperative Code, cooperatives are allowed to organize cooperative societies with capital requirements that are only half of what is required from commercial insurance companies, to this date, no cooperative insurance society has been organized yet. None has yet availed of this regulatory space inasmuch as specific guidelines for the implementation of this provision of the cooperative code have not yet been formulated. The two cooperatives currently 61
The Insurance Commission is currently working on the development of a set of performance standards for microinsurance MBAs.
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