2024-07-07 21:47:13
In accordance with the provisions of Law No. 20-13 relating to the Competition Council, the Council has taken the initiative to give its opinion on the competitive functioning of the insurance market in Morocco, in which it calls for adjusting the legal requirements for access to the insurance market and integrating them into regulatory texts to facilitate amendments.
In this sense, the Council considers that the legal requirements for obtaining approval to carry out insurance and reinsurance operations (50 million dirhams of share capital for SAs and 50 million dirhams of establishment funds and a minimum number of 10,000 members for SAMs) constitute “barriers to entry to the insurance market, particularly for small and medium-sized enterprises”.
The Council also recommends including a legal provision setting the deadline for the response by the Insurance and Social Security Supervisory Authority (ACAPS) to requests for approval for the practice of insurance and reinsurance operations, noting that the absence of this legal provision in the legal framework governing the insurance sector constitutes a barrier to access to this market for investors who need visibility, transparency and legal certainty regarding the approval system.
Similarly, the Council stresses the importance of carrying out “an overhaul of the system of approval of insurance intermediaries”, given that the current system of approval of insurance intermediaries “presents several shortcomings” both for insurance and reinsurance companies (EAR) and for persons wishing to access this market.
In this regard, the Council specifies that this particularly concerns the professional examination which constitutes a legal constraint for the development of the commercial strategy of the EARs and which blocks candidates’ direct access to the market.
The Council also mentions the requirement of a national university diploma or equivalent, which constitutes a barrier to access to the market for people with other types of diplomas, in addition to the condition of having 50% Moroccan capital for legal entities, which deprives this market of foreign investment and the know-how that it could bring.
The Council also called for further detailing the conditions for withdrawal of approval by ACAPS, noting that the insurance code stipulates that “ACAPS may partially or totally withdraw approval from an insurance and reinsurance company when the general interest so requires.”
In this context, the Council recommends defining exactly what is meant by “general interest” and limiting the scope of this concept in order to give greater visibility and legal certainty to economic operators.
On the other hand, the Council highlighted the need to improve the insurance offer in Morocco, by carrying out a legal reform to correct the competitive advantage resulting from the specialization of insurers, by gradually opening non-life insurance to the banking sector, and by developing an inclusive and innovative insurance offer and digitalizing insurance contracts.
Furthermore, the opinion recommends further developing competition in the automobile RC (civil liability) segment, introducing the obligation of direct payment of the premium to the EAR, improving sectoral regulation and supervising the missions of professional groups, in addition to improving the protection of the insurance consumer.
2024-07-07 21:47:13