News Coronavirus watch16 Apr 2020

Morocco:Agents reject insurers' offer of credit line

16 Apr 2020

Insurance agencies in Morocco are demanding that insurers bear the costs of running their agency operations, and place a moratorium on loan repayments until the agencies' financial condition recovers. They also exhort the government to waive value-added tax on their commissions.

The agencies are responding to proposals raised made last week by the Moroccan Federation of Insurance and Reinsurance Companies (FMSAR) and the National Federation of Insurance Agents and Brokers of Morocco (FNACAM) to support insurance agents and brokers in the current difficult business conditions brought about by the COVID-19 pandemic.

One proposal is for insurance companies to place a line of credit at the disposal of their general agents, who must apply for the credit line. The credit facility, available to around 1,270 agencies, is to help agencies cover three months of operating expenses, including paying staff salaries, so that the agencies would be able to continue providing services to customers.

Debt

Insurance agents consider the offer of support as inadequate, especially for those among them which are already in a difficult situation given the weight of the debts which they currently owe, according to a report by the newspaper Sabah.

Most agents are heavily indebted, and that their financial results have been hit greatly by relief measures for customers, especially the extension till 30 April of the validity of insurance policies that mature during the lockdown. As these policies were not renewed when they matured, the extension deprives agents of the commissions that they could have received had renewal premiums been paid.

The agents also say that the value-added tax imposed on commissions received from insurance companies must be abolished.

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