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Morocco: Operators prepare for the fine-tuning phase of solvency rules

Source: Middle East Insurance Review | Nov 2018

A draft circular issued by the Insurance and Social Insurance Supervisory Authority (ACAPS) has introduced qualitative requirements for new standards in the governance and risk management of insurers. The risks that must be controlled include operational risks.
 
“We are essentially targeting those that could significantly impact an insurance company or that could jeopardise its continuity, for example, risks related to information systems. We must ensure that these systems are reliable and secure, and that continuity plans exist and are operational,” said ACAPS president Hassan Boubrik in an interview with L’Economiste.
 
The new solvency rules will require regular audits of information systems, self-assessment of risks that may impact the solvency or financial situation of insurance companies, and the rise of some functions such as actuarial.
 
Other risks also covered are linked to important processes, including accounting and financial reporting, provisioning, underwriting and claims management.
 
Mr Boubrik said that with regard to intermediaries, it does not appear to him that they could give rise to significant operational risks because of their fragmentation and the sense that the relationship with insurers is generally limited to the insurance transactions, the collection of premiums, and sometimes the management of claims. They will be accompanied by the insurers and they will be asked to make the effort to comply with procedures.
 
Information systems play a key role in the functioning of an insurer and support all its activity on a daily basis, said Mr Boubrik. “The tremendous technological revolution we are witnessing opens up extraordinary opportunities for the development of insurance. It also poses challenges for new emerging risks. For example, cyber risk is cited today as one of the most important threats that can lead to a major international financial crisis.”
 
Insurers in Morocco have been investing for some time and significantly in information systems. However, regulations have not caught up and it becomes imperative to close this gap. M 
 
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