The study identified several challenges to unlocking the use of cell captives in the provision of insurance to the low-income market: ·

• Statutory recognition and regulation. Legislation should provide for legal separation between the cells of each cell captive and should recognise each cell as having a separate legal personality.·
• Grey compliance areas. There seems to be differences of interpretation between market participants with regards to FAIS and FICA in the context of cell captives. The Regulator could consider clarifying these.·
• Future solvency regime must consider the impact on cell captives. The envisaged implementation of Solvency II in Europe has lead to concerns there that cell captives might be faced with disproportionately large regulatory and compliance burdens. Locally, the FSB?s SAM project would need to carefully consider how to deal with cell captives.·
• Roles and responsibilities of cell owners. There is a perception among industry participants that prospective cell owners often have little or no understanding that cell captive insurance is a sophisticated insurance tool that needs a wide variety of skills to manage properly.·
• Use of mutual cells. It seems that a number of prospective cell opportunities in the microinsurance market are just not of suitable size to be financially viable. There might be need for a market mechanism where similar ventures are grouped together so they can jointly form a mutual cell. The regulatory and practical implications of doing so should be investigated further.