The International Association of Insurance Supervisors has opened a consultation on a draft paper setting out issues on Index-based Insurances.
Index Based Insurances involve contracts where a claim is defined with reference to a pre-determined index. These are seen as a possible way forward for claims relating to weather related or natural catastrophe risk event risks, in particular as they potentially offer a way to reduce claims administration and speed up payment of claims. This could thereby be a way to open up access to insurance coverage to lower income individuals or those who otherwise experience barriers to access to insurance.
The draft Issues Paper includes background on the reason for the development of insurance based insurance, and also covers issues relating to legal certainty and consumer protection.
The consultation is open for comments and feedback until 29 January 2018.