Morocco: Govt works on new solvency rules for insurers
Source: Middle East Insurance Review | Sep 2017
The government of Morocco is working to set up a new framework for solvency regulation in the insurance sector.
If the proposed risk-based solvency framework were to come into effect, Moroccan insurers and reinsurers in ensuring solvency adequacy would have to take into account all their activities and the risks they face, namely, underwriting risk, operational risk, investment policy, market risk, and concentration or counterparty risk, reported Agence Ecofin.
Another aspect of the proposed reform is qualitative requirements aimed at strengthening the governance systems of insurers and reinsurers and their control measures, in particular audits, internal control and risk management systems.
There is also a need for the sector to improve financial disclosure. The objective is to promote financial transparency for communication and control purposes.
According to the Financial Stability Report published recently, the average solvency margin in the insurance industry increased at the end of December 2016 to 449% against 408% at the end of 2015. However, with the shift to risk-based solvency, some players in the sector may have to recapitalise. M