New prudential rules for reinsurance

The Moroccan authorities have released the new rules for the evaluation, creation and investment of technical provisions which apply to reinsurance companies. Until recent years, the Société Centrale de Réassurance (SCR) was the only player in the market, applying its own rules.

With the arrival of Mamda Re, new prudential regulations have been established to ensure the financial stability of the business. Reinsurers are now required to assess the financial risks to which they are subject by means of simulations designed to take into account changes in interest rates and financial assets as well as their impact on the values of the liabilities and assets.

Technical provisions need to be backed by assets related to the nature, amount and duration of the liabilities. Reinsurers are also required to distinguish two separate accounts on the representations of the technical provisions of reinsurance operations related to the legal transfer from those relating to the Moroccan conventional operations.

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