Algeria's proposed new insurance law, whose enactment has been delayed, can address several challenges facing the insurance industry, according to Cash Assurances former CEO Mokhtar Naouri.
In an interview with Algerie Eco, he said that among the issues the law can address is the online distribution of insurance products. In addition, the bancassurance system must be reviewed to increase the share of banks in insurance companies to at least 34%, or even 49%. “This will allow for the establishment of real partnerships that can boost the personal insurance sector in particular,” he said.
Other improvements
Mr Naouri said that other matters the proposed new law can address are:
Code of Ethics
The law should provide for the establishment of a code of ethics for the insurance sector to promote market discipline and combat unfair competition.
Motor third-party liability insurance
What the law can also do is to revise the tariffs for motor vehicle liability insurance. Currently, the tariffs do not allow insurers to achieve technical balance. A the same time, the system for compensating policyholders against bodily injury is very disadvantageous for policyholders and beneficiaries.
Technical provisions
Regulations need to be revised that govern technical provisions, technical commitments, and the solvency of insurance companies.
Governance
The new law must have provisions aimed at improving the governance of insurance companies by reviewing the composition and functioning of the boards of directors of insurance companies and by requiring the creation of specialised committees within the boards of directors for better control of key functions: audit, actuarial determinations, risk management and compliance.
Review
In May 2024, Algerian President Abdelmadjid Tebboune ordered the postponement of a Bill, which when passed would update and modernise the insurance law. The reason is to allow more time to re-examine proposed changes to the law. It was previously expected that the Bill would be submitted to both houses of Parliament before the end of 2023,
Mr Naouri said, ”It should be remembered here that this Bill dates from the end of the 2010s. Its postponement will allow us to take advantage of recent experiences observed on the market and probably of new economic and social circumstances which would deserve to be taken into account.”
He said that the insurance industry expects the law to improve insurance turnover and increase insurance penetration in the country.