The Finance Law 2027 (PLF2027), approved by the Council of Ministers, proposes the establishment of a new independent authority for insurance regulation in Algeria, to be called the Insurance Regulatory and Supervisory Authority.
This new agency is designed to replace the existing Insurance Supervisory Commission, which is part of the Ministry of Finance and was established in 2006. Endowed with legal personality and financial autonomy, it will be responsible for overseeing insurance companies and intermediaries, with the specific objective of ensuring the protection of policyholders and the solvency of insurance companies.
The new Authority will issue regulations and conduct regular and periodic audits of operations carried out by (re)insurance companies and insurance intermediaries to ensure that the operations comply with legislation and to verify the solvency of these companies.
The Authority will be financed by state budget allocations and by a contribution from insurance and/or reinsurance companies calculated in proportion to their turnover.
Rationale
In an explanatory memorandum, the government explains that the proposal to create the Authority aims to adapt the insurance regulatory and control framework to the development of the Algerian insurance market.
“This measure also aims to provide the regulatory authority with the necessary human, material, and financial resources for the proper oversight of this sector, following the model of many foreign experiences in this field.” As such, this Authority will be granted legal personality and financial autonomy.
“Furthermore,” the government says, “the option of an independent authority aims to promote the principle of neutrality in the Algerian insurance market, by establishing a distinction between the mission of the State as regulator and controller and those of the State as sole shareholder in public insurance companies.”
The Algerian insurance industry has been calling for several years for the establishment of an independent regulator. This would be part of reforms regarded as vital to the modernisation of the insurance industry, to make it more competitive and to reorganise its operations.