Morocco: Insurers in risk-based prudential framework trial
Source: Middle East Insurance Review | May 2018
Insurers in Morocco are working hard to shift to new risk-based regulatory requirements, with tests to be conducted before June to assess the impact of the requirements on insurers.
The purpose of the tests is to see the impact of the new solvency and provisioning requirements on the capital of insurance companies. Some insurers may have to increase capital to meet the new requirements.
Mr Bachir Baddou, director general of the FMSAR, said the insurance industry is moving towards final adoption of the framework by 2021.
Since the release of a draft circular on the new prudential framework by the Insurance and Social Insurance Supervisory Authority (ACAPS) six months ago, meetings have been held between the Authority and insurance companies under the auspices of the Moroccan Federation of Insurance and Reinsurance Companies (FMSAR), reports La Vie Eco.
“Two meetings were held with the companies in December 2017 and January 2018 to set the stage and begin the process of adopting the new standards,” said a senior ACAPS official.
According to both sides, it will be a matter of consulting one another throughout the process of adoption of the new risk-based prudential framework. “We will migrate to the standards of the new prudential framework through a consultation process that will take place in a structured manner and planned over time,” said the head of a large insurance company.
Under the framework, insurers and reinsurers will have to put in place a system of governance that takes into account the nature, volume and complexity of their activities, as well as the associated risks. This system includes a risk management system, an internal control system and an information and data management system. M