From 1 January 2020, catastrophe insurance is set to become mandatory in Morocco as the relevant law enters into effect.
Several types of insurance policies will automatically include the catastrophe cover, including motor third party liability policies and public liability insurance contracts acquired by property owners.
The new decree imposes a new tax on premiums and contributions paid under these insurance contracts, to cover catastrophe risks.
According to the legislation, a catastrophe is one which causes damage due to an unpredictable event of nature, such as earthquakes, floods, tsunami, or a violent human action constituting a terrorist act, a riot or a popular movement.
The legislation excludes from the scope of the scheme the following:
- the use of chemical, biological, bacteriological, radioactive or nuclear chemical agents or weapons;
- civil war; foreign war; or acts of hostility whether or not war is declared;
- an act of cybercrime.
Solidarity fund for uninsured victims
In addition, the new law provides for a solidarity fund against catastrophic events to compensate the victims who are uninsured. The fund will be financed by a parafiscal tax of 1% of premiums paid under insurance contracts applicable to all insurance operations except for workplace accident insurance, life insurance or life annuities taken by non-residents and contracts relating to a risk situated abroad or relating to an industrial, commercial or agricultural establishment located abroad.