Insurance stakeholders list impediments to cross-border investment, expansion
Insurance stakeholders in the West African sub-region have identified key challenges affecting cross-border investment and integration of insurance sector within member countries in the region. They agreed that the sector could do much better if these obstacles are tackled to allow for easy operation of businesses across the borders of member countries and territories.
Some of the challenges listed as to why the West African Monetary Zone (WAMZ) Insurance Sector Integration remains elusive include the lack of harmonisation of legal and regulatory frameworks governing the sector, the high costs of transaction, and the insolvency regime.
According to the stakeholders, “Measurement of assets, minimum capital requirements, regulatory solvency capital, insurance laws, solvency laws, policy holder priority during wind-up, scope and coverage of insurance policies and the existence of other types of policyholder protection are some of the jurisdiction dissimilarities, while intervention process and powers, bilateral/multilateral recognition/agreement between home and host regimes, and planning for stress and resolution situations are some of the key areas of divergence in the supervisory structures of member states of the WAMZ.”
The stakeholders, who rose from the inaugural meeting of the integration of the insurance sector in the West African Monetary Zone held last week in Abuja, stressed the need to pursue an integration agenda that not only allows for cross-border insurance in terms of setting up of insurance companies of one origin in other member countries, but also by developing policies that allow for mutual recognition of insurance operators within the region.
They also observed the need for enhanced cooperation in the area of supervision and regulation of insurance companies with cross-border presence.
“We need to harmonise the rules and the entire regulatory framework for the insurance sector across the region, so there is the need for an Insurance Supervisors’ College to periodically deliberate on issues bordering on the supervision and joint examination of insurance companies with cross-border presence,” they said.
On the way forward, they agreed on the need to streamline insurance integration efforts in the WAMZ and adopt Guinea as a member of WAICA.
Other agreements include: “Constitute the West African Insurance Sector Integration Council (WAISIC) to oversee the integration of the insurance sector in member countries of the WAMZ, while WAISIC will be made up of the heads of National Insurance Regulation in member countries and the CEOs of Insurance Associations in member countries. The CEO of the ECOWAS Brown Card Scheme and the Private Sector Department of the ECOWAS Commission, WAMI and WAICA are observer members.”
The steps will be to constitute a technical committee (TC) to advice the WAISIC on the harmonisation of the rules and regulatory frameworks, harmonisation of operational processes, and the creation of a common platform for cross-border insurance operations in the WAMZ.
By: Modestus Anaesoronye