The Insurance and Social Security Supervisory Authority (ACAPS) has announced that 13 insurers out of a total of 25 in the Moroccan market will be subject to the risk-based solvency (RBS) scheme, which is set to come into effect in 2027, after 10 years of preparations. The scheme will start based on the accounts of the insurers for the 2026 financial year.
According to ACAPS, simulations carried out with the 13 companies concerned show a solvency ratio of 274%, without suggesting any major reallocation of their investment portfolios, reported Finance News Weekly, a weekly economic and financial newspaper.
The remaining 12 insurers in the Moroccan market will continue to adhere to the current system.
At a meeting organised on 3 November by the newspaper last week, ACAPS President Mr Abderrahim Chaffai, said that the regulations relating to RBS are awaiting publication in the Official Gazette. According to Mr Chaffai, the provisions relating to governance and risk management have been operational since 2021, while the quantitative component, the ORSA (Own Risk and Solvency Assessment), and disclosure requirements are to be implemented from 2027 onwards
ACAPS has conducted three adequacy exercises and several simulations to evaluate the sector's capacity to meet the new requirements. According to Mr Chaffai, the implementation of the RBS system should result in a decrease in solvency ratios, on average by 100 percentage points compared to the current system. The latest assessment conducted with the 13 companies concerned shows a ratio of 274%, which Mr Chaffai considers to be satisfactory. As a point of reference, he mentioned a level of around 160% as an indicator of a satisfactory solvency situation.
The Moroccan market currently has an overall ratio exceeding 400% under current capital adequacy rules. These results have led the regulator to rule out, at this stage, the prospect of major constraints on companies' financial strategies solely due to regulatory change.
The simulations conducted by ACAPS do not indicate any need for the insurance companies to significantly modify their investment strategies in response to the new requirements. The reform should, however, lead insurers to refine their assessment of the cost of capital associated with each line of business and each product. Transactions requiring more equity capital, particularly those involving long-term commitments, could thus be subject to trade-offs in terms of profitability and pricing.