Smart Microinsurance – An Overview for Microfinance Institution on Incorporating Client Protection Practices into Microinsurance

Guiding MFIs on protection of microinsurance clients

This Smart Microinsurance toolkit, jointly published by the Smart Campaign and Microinsurance Network, provides guidelines for MFIs that serve as intermediaries, offering microinsurance products provided by an external insurance company. The guidelines cover the areas of social performance, product design, partnerships, and client protection. The toolkit comprises three sections, which lists social performance indicators for microinsurance, provides guidelines for microinsurance product design and for partnering with insurers and other service providers, and outlines key client protection guidelines for various phases of the microinsurance process. These phases include introducing the client to microinsurance, collecting and protecting client information, activating the insurance policy, collecting premiums and ongoing customer service, and responding to claims. The tool identifies service points for each of the phases. For each service point, the tool describes how an MFI can model good practice in its policies and procedures, and which Client Protection Principles (CPPs) apply. The CPPs listed in the toolkit are:

  • Appropriate product design and delivery;
  • Prevention of overindebtedness;
  • Transparency;
  • Responsible pricing;
  • Fair and respectful treatment of clients;
  • Privacy of client data;
  • Mechanisms for complaint resolution.