News Middle East06 Jul 2020

MENA:Arab Monetary Fund sets guidelines for dealing with natural disasters

06 Jul 2020

The Arab Monetary Fund (AMF) has called for the adoption of a comprehensive governance framework in managing natural disasters and ramifications of climate change and addressing the potential impact.

The Arab Monetary Fund (AMF) has called for the adoption of a comprehensive governance framework in managing natural disasters and ramifications of climate change and addressing the potential impact.

The AMF released a report titled “Guiding principles for central banks to address impact of natural disasters and climate change on banking system and financial stability” that recommends the establishment of an ad-hoc specialised Natural Disaster Management Committee by central banks, specifying its tasks and responsibilities which include the preparation of a recovery plans to achieve return to normal situation following a natural disaster.

For the insurance sector, the report proposes:

  • Should the insurance sector be not subject to the supervision of the central bank, it is advisable to represent the insurance supervisory authority in the Natural Disaster Management Committee.
  • The financial sector is to develop stress tests that include progressive severity hypotheses, including the potential impact of natural disasters and climate changes on the insurance sector.
  • The Insurance Supervision Department should evaluate the readiness, plans and preparations of insurers to face potential climate events. External auditors are also called upon and mandated to assess readiness.
  • The insurance sector's ability to manage and absorb the potential losses arising from natural disasters are to be constantly evaluated. Insurers are to work in parallel to strengthen the protection of consumers and ensure their rights, and use automated means to deal with customer complaints during natural disasters.

 

| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.

 

Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.