In recent years the World Bank has engaged in several pilot programs to assess the feasibility of private markets for index-based weather insurance in developing countries. Index insurance is aimed at moving from emergency ad-hoc aid in times of weather disasters to identifying and managing risk. Potential benefits include access to insurance, timely pay-out and an objective measurement for avoiding long disputes. However, its problematic aspects find no or only limited consideration in the work of the World Bank so far. The paper finds that the World Bank needs to ensure that the facility that will deal with index insurance in the future will not be biased towards market solutions, and that its aims and later evaluations are defined in terms of specific goals that directly measure the progress in poor people’s and smallholders’ actual ability to mitigate risks and avoid crisis selling of assets, not the size or profitability of the market.