The government will be tabling in parliament this fiscal year, the Micro Insurance Legislation, as it seeks to put in place a framework, whereby low-income earners can afford insurance.

Acknowledging that not every Jamaican can afford the premiums for traditional insurance sold in Jamaica, Finance and the Public Service Minister, Fayval Williams, who made the announcement in parliament on Tuesday, said the new micro insurance law seeks to meet people where they are now. 

She admitted that micro insurance legislation has been talked about for years but gave her commitment to have it in place by this fiscal year.

According to her, “this government believes that those who are low-income earners also need affordable insurance products to help them cope with and recover from financial losses…A wide variety of microinsurance products can be created for them. We have already started down this road with crop insurance for our farmers.”

Gearing up for micro insurance

She highlighted that micro insurance will significantly improve financial inclusion once the micro insurance legislation comes into effect and the industry players are geared up to offer it. 

“This will take some time and so I am estimating that we will begin to see micro insurance products by Fiscal Year 2026/27. At that time, our commitment is to assess how we can help every PATH (Programme of Advancement Through Health and Education)family (all 130,000 families) access micro-insurance to build financial resilience so that these vulnerable families can manage the financial impacts of unexpected events, such as an illness, a death, loss of income or natural hazards,” Williams said.

The Minister pointed out that one player in the insurance industry, which is looking forward to seeing the legislation come into being, estimates that it is possible to offer a micro-insurance policy with a premium as low as  J$250 Jamaican per month for a $500,000 benefit. “This is worth it, Madam Speaker, to assist the most vulnerable to build resilience,” she remarked. 

Of note, the insurance regulator, the Financial Services Commission (FSC) has indicated that it would welcome the completion of the Micro Insurance Legislation, as it has been a work in progress. The FSC has said the move will increase insurance penetration in Jamaica through the expansion of access to insurance coverage by the underserved and lower income groups to which micro insurance is targeted.

Micro insurance offers a growth opportunity for insurance providers, who understand the needs of people with low-income and can offer relevant and affordable insurance products to them. By helping to close the protection gap, micro insurers can also seize this untapped business opportunity.