Protection of the microinsurance consumer: confronting the impact of poverty on contractual relationship

Description: 

This paper provides a legal analysis of the contractual vulnerability of the microinsurance consumer and in so doing, studies mechanisms that effectively protect such a consumer. The microinsurance consumer is in a particularly vulnerable contractual position as consequence of his or her “poverty”. Owing to “poverty”, the microinsurance consumer typically lacks the essential capabilities required to provide free and informed consent to enter into, to perform and to demand the performance of the insurance contract and to complain and seek remedies in appropriate forums. Accordingly, the microinsurance consumer may not be able to benefit from the insurance contract and microinsurance may have limited utility. Consumer protection is essential to address this discrepancy. Consumer protection should be based on a legal framework and should place obligations on States and insurers, reinsurers and intermediaries who participate in the value chain of microinsurance.

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Author: 

Andrea Camargo

Publisher: 

ILO

Number of pages: 

24

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