Insurance soon to be a reality for informal and small businesses

Work is advanced on the proposed Microinsurance Bill, which is expected to be tabled in Parliament before the end of the current fiscal year in March next year.

This was disclosed by Minister of Finance and the Public Services Dr Nigel Clarke who said he anticipates the legislation's passage during the 2022/23 fiscal year, which starts on April 1, 2022.

“The Ministry of Finance and the Public Service has been working with the Office of the Parliamentary Counsel and the Attorney-General's chambers to bring this legislation to life. It is, therefore, my expectation that microinsurance will become a reality in Jamaica at some point in the next fiscal year,” he added.

Clarke was speaking during the Insurance Association of Jamaica (IAJ) semi-virtual microinsurance conference at The Jamaica Pegasus hotel in New Kingston on Wednesday.

It was staged under the theme 'Microinsurance – The Jamaica Perspective'.

Clarke said the development and implementation of a microinsurance policy framework formed part of the Government's thrust to broaden the base of the economy and deepen its inclusiveness by making insurance accessible to all Jamaicans.

He noted that insurance provides financial resources to offset known and unknown risks which was crucial, whether in relation to property, life, or any other area.

The finance minister pointed out, however, that with the legislative framework anchored in the existing Insurance Act, it “does not easily allow for microinsurance products to be developed, marketed and sold”.

“To make insurance available to informal commercial importers, to small enterprises and small firms, to persons on the lower end of the income scale, it would be necessary for risks to be pooled so that the insurance product can be affordable,” he informed.

Clarke pointed out, however, that the Insurance Act “doesn't easily allow for the pooling of risks because of the requirements that one has to have an equitable interest in what is being insured”.

As such, he said the Government is taking steps to put the provisions in place that facilitate the development, marketing and sale of microinsurance products in a “wholesome” way, particularly to the target cohorts.

He maintained that for the industry to thrive among Jamaicans, it must, among other things, “serve the needs [of] the hundreds of thousands of persons who fall outside the financial services window… for those persons to be brought in”.

“The Government is serious about inclusive economic recovery. Therefore, we are taking steps to enhance the policy environment and the legislative framework to bring hundreds of thousands… of the uninsured into the formal financial services space where they, too, can have access to insurance products,” Clarke added.

- JIS News

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