Chapter 2 (Micro-insurance)

Question 1

What do micro-insurers benefit from

Answer 1

Lighter prudential requirements
-lower minimum regulatory capital requirements
-simpler, dedicated prudential regulatory model suited to the risk profile of micro-insurers

Question 2

What does the governance and operational standard for micro-insurers limit the amounts to?

Answer 2

-R100 000 for life,accident and health
-R300 000 per policy

Question 3

LTIA policyholder protection rules requirements for micro insurance

Answer 3

1) term limited to 12 monht
2) Waiting period must be less than 1/4 of policy term and have to take previous WP into account
3) policy benefits have to be defined on SA basis
4) limits on exclusions that apply and exclusions on pre-existing conditions are not allowed
5) valid claims have to be settled within 2 business days

Question 4

What are assets valued as

Answer 4

Cash and cash equivalents are valued at MV

Question 5

TPs are valued using a formula-based approach comprised of:

Answer 5

1) Unearned premium reserve
2) Outstanding claims reserve
3) Incurred but not reported
4) Unexpired risk provision

Question 6

How is the minimum capital requirement determined

Answer 6

15% of net premiums written for policies entered into in the 12 months prior, subject to an absolute minimum of R4 million