Morocco is strengthening its protection against natural disasters by increasing the parafiscal solidarity tax levied on insurance contracts.
Starting at a rate of 1%, this parafiscal tax was increased to 1.5% under a decree published in the Official Gazette on 18 September 2025.
The Government Council has approved the increase in the solidarity levy applied to insurance contracts, intended to finance the Solidarity Fund against catastrophic events.
The solidarity tax applies to a wide range of insurance products. It includes motor, marine, and aviation insurance, as well as contracts relating to accidents, illness, credit, fire, hail, and livestock mortality. Certain categories remain exempt, such as life insurance for non-residents of Morocco and contracts covering risks occurring abroad.
The increase in the levy rate comes at a time when extreme climate risks are increasing, leading to more frequent and costly compensation payouts. The Al Haouz earthquake in September 2023 doubled the financial burden associated with seismic risk and highlighted the limitations of the initial levy rate.
In addition, the significant increase in reinsurance costs on international markets is also weakening the balance of the system, making a review of contributions essential. However, premiums or contributions due before the decree comes into force but not yet paid remain subject to the old rate of 1%.
The protection Fund, which came into force in January 2020, is based on two components. Policyholders, with a contract, benefit from mandatory coverage against natural disasters integrated into their policies, covering bodily injury and material damage affecting homes, businesses, and industrial facilities. However, for uninsured individuals, the Fund compensates victims directly. The loss of the primary residence is compensated up to a limit of MAD250,000 ($27,500), and bodily injury is compensated up to 70% of the amount allocated to policyholders.
In addition, beneficiaries of deceased, missing, or permanently disabled victims are also covered by the scope of protection. Similarly, members of a household whose home becomes uninhabitable and those involved in rescue operations may claim compensation. The final amount of compensation is adjusted by the Ministry of Economy and Finance according to the financial capacity of the Fund.