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Morocco: Insurance intermediaries want remuneration review

Source: Middle East Insurance Review | Apr 2018

The Moroccan Union of Insurance Agents and Brokers is demanding a review of the remuneration of insurance intermediaries in the country, including an increase in the commission rate payable to them that has remained unchanged the last 40 years.
 
   Mr Youssef Bounoual, President of the Union, in an interview with The New Tribune, outlined the main grievances and claims of insurance intermediaries that have led to a national strike by intermediaries on 26 February.
 
   The first issue relates to the commission rate payable to intermediaries and the additional work they have been shouldering.
 
   Mr Bounoual said: “For us, the main motivation, and the main demand, is that we want to benefit from the prosperity of this sector. The insurance market has achieved significant turnover. We are the strongest link in the distribution chain, but unfortunately, our commission has not moved for 40 years.”
 
   He also said that the remuneration structure remained unchanged over the years even though many tasks have been outsourced by insurers to intermediaries, including account opening, advice, production, expertise, and even the taking of photos in the event of minor losses in disasters. The Union has started a study to evaluate the costs of such outsourcing.
 
   The second grievance felt by insurance brokers and agents is VAT, he said. The Moroccan government has increased the VAT to 20% this year from the current 14% on services provided by insurance intermediaries, a move which will increase costs in the sector by MAD210 million (US$22.9 million) a year.
 
   The third issue is the legal protection of intermediaries. Mr Bounoual said that before a complaint against an intermediary is sent to the court or the judicial police, the intermediary should be given the chance to represent itself before a Disciplinary Committee within the Supervisory Authority of Insurance and Social Welfare (ACAPS).
 
   The Union also wants to correct the relationship between intermediaries and insurers, because currently, the relationship is one of subordination on the part of the intermediary.
 
   Mr Bounoual said that technically and legally speaking, insurers are free to quote or adjust commission rates to intermediaries. But these rates have remained unchanged. In particular, the Union wants the commission rate for motor business to be raised to 25%. Currently the automobile branch represents 80% of the turnover of 90% of the intermediary network. “It is the branch that gives life to the insurance intermediary,” he said.  M 
 
MAD1 = US$0.11
 
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