Mutuals, co-operatives and community-based organisations (MCCOs) have a key role in providing insurance access and should be regulated appropriately, according to a guidance paper from the International Association of Insurance Supervisors (IAIS).

“MCCOs can overcome geographic, cultural, service and product design challenges which other insurers might not be able or willing to address in order to provide insurance to low income populations,” the IAIS says.

The guidance paper aims to ensure Insurance Core Principles are applied so they “contribute to removing unnecessary barriers by disproportionate regulation and supervision”, while also ensuring policyholder protection.

The paper says such organisations have the potential to become very large and diverse and \little different from publicly listed companies in the way they are run, despite efforts to maintain a mutual identify.

“Therefore those very large MCCOs should be subject to the same requirements as shareholder companies,” it says. “This may particularly be the case when there is a significant number of policyholders who are not member or owners and therefore have little or no say in the governance of the [organisation].”