Microinsurance: the CARD MBA

Transcription

1 Microinsurance: the CARD MBA By: Dr. Jaime Aristotle B. Alip CARD MRI Managing Director June 2005, KfW, Tbilisi, Georgia

2 CARD MRI CARD is a group of mutually reinforcing institutions that aims to transfer ownership, management, and control of resources to landless poor women. CARD is committed to provide continued access to microfinance services to an expanding client base by organizing and empowering landless rural women.

3 CARD MRI ORGANIGRAM CARD MRI CARD NGO Microfinance CARD (1987) Bank (1997) CARD MBA (1999) CARD Training Institute 2003 CARD Marketing (2006) CARD Housing (2008)

4 CENTER FOR AGRICULTURE AND RURAL DEVELOPMENT MUTUAL BENEFIT ASSOCIATION, INC. (CARD MBA)

5 CARD-MBA MISSION STATEMENT CARD-MBA is a mutual benefit association formed to promote the welfare of marginalized women; to extend financial assistance to its members in the form of death benefits, medical subsidy, pension and loan redemption package; and to actively involve the members in the direct management of the association including formulation and implementation of policies and procedures geared towards sustainability and improved services.

6 BRIEF HISTORY April 1994 Members Mutual Fund (MMF) was established for loan redemption in case of death of member-borrower. September 9, 1999 the ownership and management of MMF were turned over to the members and from then on it was called CARD Mutual Benefit Association, Inc., better known by its acronym CARD MBA. October 29, 1999 CARD MBA was registered with the Security and Exchange Commission (SEC). This gave CARD MBA its legal personality as a non-stock and non-profit organization

7 August 1, 2000 CARD MBA was registered with the Office of the Insurance Commission as a mutual benefit association This was the reckoning date for the refund of contribution of resigning members. May 22, 2001 Office of the Insurance Commission released the license of CARD MBA to operate as a mutual benefit association. MEMBERSHIP Started with 26,352 members. This has increased to 124,733 by December 2004.

8 PRODUCT LINES 1. Life Insurance Program 2. Provident/Retirement Savings Fund 3. All Loans Insurance Package 4. Refund of Contribution **Non-Financial Services** 1. Livelihood Training Program 2. Iskolar ng CARD MBA 3. Marketing Assistance 4. Mass Wedding 5. Credit Bureau

9 CONTRIBUTIONS MODE OF PAYMENT LIFE INSURANCE AMOUNT OF CONTRIBUTIONS FOR PROVIDENT FUND TOTAL WEEKLY P5.00 (US$0.09) P5.00 (US$0.09) P10.00 (US$0.18) MONTHLY P20.00 (US$0.37) QUARTERLY P60.00 (US$1.11) SEMI- ANNUAL P (US$2.22) ANNUALY P (US$4.44) P20.00 (US$0.37) P60.00 (US$1.11) P (US$2.22) P (US$4.44) P40.00 (US$0.74) P (US$2.22) P (US$4.44) P (US$8.88) 1.5% per annum of the amount of loan which is deducted from the loan proceeds. Period of cover is coterminus with the term of loan.

10 CARD MBA LIFE INSURANCE BENEFITS LENGTH OF MEMBERSHIP CAUSE OF DEATH OR TOTAL AND PERMANENT DISABILITY MEMBER LESS THAN 1 YEAR DUE TO PRE-EXISTING CONDITION Php1, (US$18.51) MORE THAN 1 YEAR BUT LESS THAN 2 YEARS MORE THAN 2 YEARS BUT LESS THAN 3 YEARS DUE TO SICKNESS/DISEASES AFTER RECOGNITION DUE TO ACCIDENT DUE TO SICKNESS/DISEASES DUE TO ACCIDENT DUE TO SICKNESS/DISEASES DUE TO ACCIDENT Php3, (US$55.55) Php10, (US$185.18) Php3, (US$55.55) Php13, (US$240.74) Php16, (US$307.40) Php31, (US$585.18) 3 YEARS AND ABOVE DUE TO SICKNESS/DISEASES Php16, (US$307.40) DUE TO ACCIDENT Php36, (US$677.77) LEGAL DEPENDENT none Php3, (US$55.55) Php3, (US$55.55) Php3, (US$55.55) Php3, (US$55.55) Php6, (US$111.11) Php6, (US$111.11) Php6, (US$111.11) Php6, (US$111.11)

11 Total and Permanent Disability Monthly Benefits AMOUNT OF MONTHLY BENEFITS FOR MONTH PARTICULARS CONTRIBUTION (Php) Php 16, (US$307.40) Php 6, (US$111.11) Php 3, (US$55.55) 1 ST Notice of Disability (US$0.37) (US$17.07) (US$6.16) (US$3.09) 2 ND -6 TH Observation Period (US$1.85) 4, (US$85.37) TOTAL (US$2.22) 5, (US$102.44) Total amount of contribution for six (6) months (to be refunded only if the member is the one who was disabled) (US$2.22) 1, (US$30.83) 1, (US$37.00) (US$2.22) (US$15.37) (US$18.44) (US$2.22) Total amount of first payment of benefits 5, (US$104.66) 2, (US$39.22) 1, (US$20.66) 7 th to 18 th Amount of Benefit (US$17.07) (US$6.16) (US$3.09) TOTAL Php 16, (US$309.62) Php 6, (US$113.33) Php 3, (US$57.77)

12 PROVIDENT FUND It is an administered fund intended for the retirement of members that can be availed of in lump sum at age 65. An active member pays a weekly contribution of Php5.00 (US$0.09) until she reaches the age of 65. These contributions are being placed in almost risk-free, highinterest bearing instruments, ex. Government retail bonds, time deposits and institutional loans. Depending on the entry age of the members in the association, the accumulated fund at age of 65 assuming default-free weekly contribution, their retirement funds allotted to them are shown in the Table of Benefits at Age 65.

13 Table of Benefits at Age 65 A G E CONTRI- BUTION (US$) BENEFITS AT AGE 65 (US$) A G E CONTRI- BUTION (US$) BENEFITS AT AGE 65 (US$) A G E CONTRI- BUTION (US$) BENEFITS AT AGE 65 (US$) , , , , , , , , , , ,

14 ALL LOANS INSURANCE PACKAGE All Loans Insurance Package is an innovation of the Loan Redemption Fund (LRF) to give total loan protection to its members-borrowers and also to give protection to the CARD MBA s accredited lending institutions by ensuring 100% collection of loans extended in case of death of the member-borrower. The ordinary LRF pays only the balance of the loan but with 1.5% of the principal amount of loan as contribution, the program pays the principal amount of loan of the dead member-borrower.

15 REFUND OF CONTRIBUTION Upon resignation before the age 65 after three (3) years of continuous membership, the member is entitled to fifty (50) percent refund of all the contributions made for Life Insurance less claims availed of and 100 % of all contributions made for Provident/Retirement Fund plus regular savings interest.

16 CARD MBA ORGANIZATIONAL STRUCTURE BOARD OF TRUSTEES BOARD OF ADVISERS PRESIDENT GENERAL MANAGER ASST. MANAGER FOR OPERATION ASST. MANAGER FOR ADMIN & FINANCE UNDERWRITING FUNCTIONS CLAIMS FUNCTIONS PROVINCIAL OFFICES ADMINISTRATIVE & FINANCE FUNCTIONS PROMOTIONS & UNDERWRITING OFFICER CLAIMS SETTLEMENT OFFICER PROVINCIAL MANAGER ADMIN & FINANCE OFFICER INSURANCE PROCESSOR CLAIMS ADJUSTER Insurance Underwriter Insurance Processor BOOKKEEPER MBA COORDINATORS MBA COORDINATORS

17 CARD MBA Profitability (in US Dollars) Year 2004 $278, Year 2003 $404, Year 2002 $235, Year 2001 $38, , , , , , , , , ,000.00

18 IMPACT TO MEMBERS/COMMUNITY Surveys showed that the products and services of CARD MBA have been rated as number one in terms of clients satisfaction. CARD MBA has been able to meet a specific demand of client-members for insurance in case of death to cover burial expenses, to repay the loan in case of death of a member-borrower, and provident fund or retirement savings for old age.

19 More poor families joined CARD Program. Empowering the poor and better governance since they owned MBA. Steady source of fund for CARD

20 CONCLUSION The products of the CARD MBA are innovative in that they meet the demand for micro-insurance of poor households in relatively large numbers. It is focused on helping poor families cope with risk factors associated with death, total and permanent disability and old age. The Association s experience shows that micro-insurance can be a viable undertaking provided there is a critical mass of clients and adequate resources that could meet pooled risks. Micro-insurance is relatively new to the Philippine micro-finance sector, and CARD MBA is a trail-blazer.

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