The Insurance and Social Security Supervisory Authority (ACAPS) has carried out a third series of tests for Pillar One of its proposed Risk-Based Capital (RBC) system and the model is now stabilised, according to its president, Mr Abderrahim Chaffai.
He was speaking at a financial industry event organised by Finance News Weekly.
The results of the tests show that the sector's solvency goes from 3.5 in the current prudential framework to 2.25 under RBC. This shows that the situation remains comfortable for the market despite the new regulatory constraints.
The RBC project was drawn up in 2017 and is due to be implemented in 2025 to comply with international requirements for the supervision of insurance companies and to enable better identification and control of the various risks faced by insurance companies. The RBC system consists of three pillars:
- Pillar 1: Quantitative
- Pillar 2: Qualitative
- Pillar 3: Reporting and disclosure
Concerning Pillar 2, which covers governance and risk management, the regulations are almost ready, said Mr Chaffai. A draft of the regulations has been submitted to the Ministry of Finance for approval. Meanwhile, Pillar 2 is the subject of an ACAPS circular. Insurance companies are already adhering to the requirements set out in the circular.
The ORSA (Own Risk and Solvency Assessment) model is also finalised and has been shared with insurance companies. Mr Chaffai said, "We continue to explain it before adopting it definitively."
Mr Chaffai said, "If all goes well, the RBC system will be in place for 2026 for the 2025 accounts. Everything is studied with all the stakeholders so that this regulation is in the interests of the sector and will be sustainable."