The Federation of African National Insurance Companies (FANAF) has proposed the establishment of a guarantee fund to protect policyholders.
This proposal, following the bankruptcy of a life insurance company, was raised during discussions last week in Libreville held by FANAF with CIMA (Inter-African Conference on Insurance Markets) and officials of the finance ministries of the 14 member countries of CIMA, reported Financial Afrik.
The secretary general of CIMA, Mr Issofa Nchare, said that if a policyholders' protection scheme was set up, it would reinforce other preventive measures put in place by regulators, that include raising the minimum capital.
During the meetings between insurers and regulators last week, insurers criticised regulators for increases in costly regulatory requirements. Mr Adama Ndiaye, then president of FANAF, said that more than 50 fiscal measures were imposed on insurers in the past 10 years, including a VAT on life insurance premiums.
Another issue discussed was the increase in required minimum capital in the sector. So far, an expected wave of consolidation has yet to take place in the industry.
CIMA called in 2016 for an increase in the minimum capital of state owned insurers from FCFA1bn ($1.65m) to FCFA5bn and of mutual insurance companies from FCFA800m to FCFA3bn. The first phase of the capital increase, setting the minimum capital at FCFA3bn for insurance companies and FCFA2bn for mutuals, had a deadline of 31 May 2019.
In a related move, FANAF held its 44th general assembly on 20 February, during which members elected Mr Cesar Ekomie-Afene, chairman of NSIA Assurance Gabon and CEO of NSIA Life Gabon, as FANAF president He succeeds Mr Ndiaye, who was president of the association from 2014 till last week.