the major projects of the regulator


Finances News Hebdo: What conclusions can we draw from the activity of the insurance sector in 2021?

Othman Khalil El Alamy: First of all, I would like to point out that the year 2021 was marked by a good performance in the insurance market, with turnover crossing the 50 billion dirham mark (excluding exclusive reinsurers), up 10% , according to the latest provisional data. And as the figures show, this performance is driven both by life insurance, which recorded an increase of 11.7%, and by the non-life branch, which posted a growth rate of 8.6%. . More specifically, growth in the life business was driven by savings, which grew by 12%, thanks to the good performance of supports in dirhams (+11.3%) and the sustained momentum of supports in units of account (+19.8%). As for non-life issues, the improvement is mainly due to the return to growth of motor insurance, with an increase of 7.8% after a virtual stagnation in 2020 under the effect of the health crisis. From a financial perspective, the year 2021 marks the recovery of the stock market (+18.35% of the MASI index), which has brought unrealized capital gains back to their pre-crisis level. In addition, the outstanding amount of investments allocated to insurance operations rose in inventory value, at the end of December, to 186 billion dirhams, posting an increase of 7.2% since the beginning of the year.

FNH: How do you assess the resilience of the sectors supervised by ACAPS after 2 years of health crisis?

OKEA: As you know, like other business sectors, the insurance sector has been affected by the effects of the health crisis. However, and thanks to its fundamentals, this sector has shown resilience in the face of this situation. Thus, issues by insurance and reinsurance companies (excluding exclusive reinsurers) experienced a slight increase of 1.8% in 2020, thus marking a deceleration, while 2021 announces a recovery of the upward trend that began ten years ago, thus posting a growth of 10%. From a financial standpoint, the contraction of the financial market in 2020 and the sensitivity of the portfolio to equity risk weighed on the balance sheet situation of insurance and reinsurance companies, despite the measures deployed by the Autorité to mitigate the effects of crisis. Thus, unrealized capital gains fell sharply by 25.7%. This situation, it should be noted, improved significantly in 2021, benefiting from the recovery of the financial market.

FNH: At the end of 2021, ACAPS began issuing the first Takaful licenses to the market. Can you tell us more?

OKEA: It must be said that Takaful insurance is a promising activity to which the Authority attaches great importance. As the fundamental foundation of the participatory finance ecosystem, this insurance has taken an important step with the publication, in October 2021, of the regulatory texts governing this activity. As soon as these texts were published, the Authority took action to examine applications for approval for the exercise of Takaful insurance and reinsurance. It should be recalled in this regard that the Board of the Authority granted approval to three Takaful insurance and reinsurance companies (Wafa Takaful, Takafulia Assurances and Taouniyate Taamine Takafuli) during its meeting of December 10, 2021, and to two others undertaken at its meeting on January 28, 2022 (Almaghribiya Takaful and the SCR Re-Takaful window). The approval decisions of the first three Takaful insurance companies have just been published in the Official Bulletin of January 27, 2022. Other measures are being carried out in parallel by the Authority in order to support and accelerate the implementation of Takaful insurance business in the market. This is, firstly, the preparation by the Authority of a standard model of management regulations for the Takaful Insurance Fund and the obtaining of the assent of the Superior Council of Ulemas (CSO) on this standard model. The management regulations of the Takaful Insurance Fund constitute an essential document in the relationship between the participants in the Takaful Insurance Funds and the managing Takaful EAR. Indeed, the signature of this document by both parties triggers the participant’s membership in the Takaful insurance system and the participant’s consent to the rules and management methods of the Fund, as set by the managing company. Given the importance of this document, the legal framework provides for its submission to the approval of the Authority and the assent of the CSO. In order to speed up the validation process of the management regulations of the Takaful Insurance Funds, the standard model will be retained by the Takaful companies for the establishment of their own management regulations. Note also the development by the Authority of standard models of insurance contracts to accompany the products marketed by participating banks and the obtaining of the assent of the CSO on these models. These are the general conditions of the Takaful death-disability contract, the multi-risk building contract and the Takaful investment contract. The objective being to facilitate the effective start of this new activity and to streamline exchanges with the CSO in the granting of its assent for Takaful insurance products to be marketed by Takaful insurance and reinsurance companies approved in this start-up phase.

FNH: Do these approvals mean that Takaful companies can start their activities or are there any prerequisites (if so, which ones?)?

OKEA: The operationalization of Takaful insurance is entering its home stretch. Although the publication of the decisions of the Authority approving Takaful insurance companies in the BO is crucial in the process of operationalizing Takaful, it is not sufficient for the launch of this activity. Several formalities are required for the effective start of this new activity. These include the registration of Takaful insurance funds in the commercial register, the approval of the management regulations of Takaful insurance funds by the Authority, after the assent of the CSO, the approval of specimens of insurance contracts (including general regulations on redemptions and advances), after assent of the CSO, as well as the approval of distribution operators authorized to present Takaful insurance operations. That being so, it is useful to point out that the process of completing these formalities has already begun, and even been finalized for some.

FNH: Besides Takaful, what are the other priority projects for ACAPS in 2021?

OKEA: After a year 2020 marked by the outbreak of the health crisis during which ACAPS fully mobilized to support the insurance sector, 2021 was also rich in achievements, in particular the adoption of the 2021/2023 strategic plan, which outlines the Authority’s second three-year roadmap since its creation. Broken down into operational objectives, this plan, it should be noted, is resolutely focused on the main missions of consumer protection and ensuring the proper functioning of the regulated sectors. In addition to the Takaful project, the implementation of which will make it possible to write a new page in the history of insurance in Morocco, ACAPS is carrying out several projects within the framework of the missions assigned to it, while taking into account the issues and challenges related to the various changes both nationally and internationally. Among the Authority’s key objectives, mention should be made of the stability and sustainability of the sectors it regulates. It is moreover within this framework that the Solvency project based on the “SBR” risks fits, which is progressing at the expected pace and which will experience a progressive implementation with a view to promoting the principles of good governance for sound management and cautiousness of insurance and reinsurance companies. In the same vein, ACAPS continues efforts to strengthen its regulatory mechanisms and its supervisory mechanisms and plans, in this context, to establish an appropriate framework for macro-prudential supervision. With regard to control relating to the fight against money laundering and the financing of terrorism, the Authority has completed the transposition of international standards, in particular those of the FATF, into its regulatory framework. In terms of promoting financial education, the Authority continues, alongside the Moroccan Foundation for Financial Education (FMEF), to carry out popularization and awareness-raising actions for the general public on the sectors subject to its control in order to to better guide consumers in their decisions and thus encourage vigilant behavior. In addition, digitization is at the heart of the Authority’s priorities. It must be said that it is no longer a question of a choice, but of an imperative necessity, through support for the insurance sector in its digital transformation. The development of the level of skills in the insurance sector is not left out. This objective involves supporting the profession in building its capacities, through targeted training and dedicated platforms. In this regard, we can cite, among others, the E-Wassit Taamine program which was launched in January 2021 with a view to strengthening the skills of insurance intermediaries to enable them to follow developments in the sector.

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