Reshuffle on FANAF’s top management (Part 1)

Only at the end of its next annual meeting in Ouagadougou will FANAF elect its new chairman. After two consecutive terms, Protais Ayangma steps down with a great triumph to his credit, the reform of Article 13 of the CIMA code pertaining to the underwriting and collection of premiums.

We present herewith chairman Protais Ayangma’s speech, a sort of assessment report, at the Council of ministers in charge of insurance of the CIMA member states in late 2013:

Mr. Chairman of the Council of ministers in charge of insurance of the CIMA member states,
Distinguished Ministers,
Mr. President of the expertise committee,
Distinguished experts,
Mr. Secretary General of the CIMA
Ladies and Gentlemen,

First of all, I would like to thank you for kindly giving me the opportunity to address this august assembly, in my name and on behalf of the FANAF’s executive board despite the busy agenda, expressing all my pride to be able to take part, at your side, in this exceptional undertaking of establishing in the franc zone, a strong and prosperous insurance industry.

This consideration further confirms the strength of the relationship between CIMA and FANAF and stands as a prelude for good future collaboration prospects between our two organizations.

Distinguished Ministers,

When in February 2008 in Bamako, I was unanimously entrusted by my peers with FANAF’s top management for a period of three ( 3) years, renewable once , I decided with the support of executive board to ensure that my term of office be wholly dedicated to market development by relying primarily on three levers : training , communication and sector clean-up.

Despite my legitimate concerns, I had to take part, under pressure at the beginning, in the proceedings of the experts’ committee and the regional commission of insurance supervision (CRCA), bodies that are so much dreaded by the insurance community insofar as their sessions often result in injunctions, sanctions and regulatory adjustments not always well received by our members.

I was doubly conscious, on one hand, about the necessity to honor my statutory obligation by taking part in CRCA’s proceedings, and on the other hand that nothing relevant and sustainable could come out of the consolidation process without full and open collaboration with the Conférence Interafricaine des Marchés d’Assurance (CIMA), the insurance supervisory body, common to all fourteen (14) states of the franc zone.

I endeavored, therefore, from the early stages to follow in the footsteps of my predecessors, André BAYALA, Richard LOWE and Jean DIAGOU, the relentless architects of cooperation with the regulators to whom we owe the CIMA - FANAF roundtable, one of the great moments of our annual general meeting, strengthening collaboration between the CIMA and FANAF and endowing it with a new perspective and new stakes.

In this quest, our first challenge was to multiply exchange frameworks among our organizations and to set up, if need be, an ad hoc committee designed to reflect on the key issues of the business and seek collaborative solutions that are likely to promote insurance regulations and laws in the CIMA zone.

Six years later, and as I prepare to step down, I would like to thank you for the tremendous progress and breakthroughs the insurance industry has undergone in recent years.

Thanks to a substantial and well targeted legislative activity, you have managed to cope with and sometimes anticipate our wishes.

The adoption on 11 April 2011 in N'Djamena of a regulation amending a number of articles (namely13) of the Insurance Code pertaining to underwriting and premium collection, better known under the name of "Article 13 reform" has undoubtedly been one of the highlights of your legislative activity , given its impact on three levels:

  • In terms of the expectations of insurers keen on avoiding suicidal practices and to providing an environment that is more conducive to the development of their business;
  • In terms of the passionate dedication aroused in our favorite partners , the brokers who have always been keen on preserving at all cost the exorbitant privileges conferred on them by the famous collection authority;
  • In terms of the change in the mindset of the insured for so long accustomed to settle insurance premiums in installments to insurers whose main selling point was providing loans on longer terms.

However, these achievements should not make us lose sight of the tremendous improvements recorded in other equally important areas, including:

  1. improving corporate governance , whereby the adoption of regulations requiring companies to have adequate internal control and inviting councils to set up committees for specific tasks, will produce far-reaching beneficial effects , especially since the approval of auditors by CIMA, another significant breakthrough that will ascertain more rigorous bookkeeping and compliance of the norms;
  2. Standards for assessing the financial health of insurance groups where a comprehensive body of regulations helped establish modern rules for the consolidation of accounts , for reporting and record-keeping of statistical statements but also for the reduction and simplification of assistance costs levied by parent companies on subsidiaries in the CIMA zone;
  3. Strengthening anti-money laundering and terrorist financing, even though we have to deplore the difficulties associated with the complexity of the rules and their implementation in small-sized insurance companies;
  4. The new system of sanctions , which provides the Commission with fast and autonomous means of intervention , thus, avoiding red tape associated with the implementation of judicial or administrative proceedings;
  5. Strengthening the supervision of intermediaries, through the adoption of regulations requiring brokers and general agents to establish sample slips and statements in order to enable regulators to better understand their activities and their relationships with their partners;
  6. Broadening insurable items where the adoption of a microinsurance regulation should result in an increased rate of insurance penetration and density in the CIMA zone;
  7. Reinsurance control, a risk factor, still inadequately regulated, and for which an ongoing study is being conducted in order to endow this important part of our own industry with appropriate regulations;
  8. Improving claim settlement whereby the suspension of transaction faculty and partial conclusions of CIMA - FANAF Committee is likely to provide a fairer and more comprehensive compensation system for the victims of traffic accidents;
  9. In life insurance where you endeavored to implement the first CIMA mortality tables, the foundation of endogenous statistics, with FANAF collaboration and funding.

Mr. Chairman
Distinguished Ministers,

These advances are for us FANAF and for you regulators, sources of pride and satisfaction because they have helped to improve the image and credibility of our companies and to achieve results that keen observers even the critical ones recognize.

Besides, a brief overview of key data from our industry can yield sufficient proof of the steady growth of sales, improved coverage of regulated commitments, and solvency margin, the increased level of investments, significant reduction in claim settlement delays and the gradual clearance of premium arrears.

Such great results could not have been achieved without team spirit whose ultimate aim is the creation of a credible and profitable insurance market, able to perform its dual mission of protecting property and financing economies.

This should not, however, divert our focus from the huge undertakings awaiting us to allow African insurance to better meet the expectations of government, policyholders, victims, and beneficiaries of contracts. We still have a long way to go before we could catch up with major players in our continent. In the meantime, we remain small and vulnerable actors on the scene.

Among the achievements that should be consolidated and finalized , I will mention among others:

  • The reform of the system designed to compensate bodily injuries resulting from road traffic accidents , a very advanced project which could be completed within the next few months;
  • The regulation of reinsurance and the establishment of a formal framework for the exchange of information with third countries, to better understand the solvency of reinsurers , when the latter are called upon to accept risks in our areas . This exchange of information is also essential for a better understanding of insurance groups with entities both within and outside the CIMA zone.

Alongside these projects already well in progress, it seems equally urgent for us to consider structural reforms such as:

  1. Restructuring the experts’ committee and the Regional Commission of Insurance Supervision (CRCA) with a view to strengthening the independence and expertise of the members operating within these two structures; These members that have not yet proved to be independent as they remain dominated in their vast majority by the National Directors of Insurance, in contradiction with the basic principles of the IAIS ( International Association of Insurance Controllers ) , basic principles used as a base for assessments by the IMF and the World Bank;
  2. A better allocation of financial resources of the organization in favor of its core business, control; Expenditure on meetings and members’ per diem are extremely huge resources compared to those allocated to auditors’ motivation, training and their remuneration;
  3. Finalizing the process for the establishment of a motor guarantee fund to supplement the compensation system for the victims of traffic accidents;
  4. Strengthening measures against risks‘ off-shoring by both removing the possibility of exceptions and by rearranging the still unimplemented regulation establishing community co-insurance in the CIMA zone;
  5. The adoption of more realistic rules for insurance companies’ placements to avoid some of the aforementioned off-shoring and for the adoption of an accounting system that is more consistent with the specificities of the insurance industry and international standards;
  6. Pursuing consolidation of the intermediation sector by enacting a more modern distribution and intermediation
  7. Conquering new niches such as Takaful which, given its tremendous expansion in the Middle East, could contribute in the improvement of insurance density, in some countries in our area;
  8. Strengthening the powers and capacities of national insurance directorates to enable them to fully play their role as liaison between the Conference, and offsetting the shortcomings of the Conference; We are confident that a strong insurance industry cannot be sustainable unless it is monitored by strong , consistent and credible oversight body;
  9. The effective establishment of a single market; Faced with such giants as Nigeria and South Africa, CIMA will not make regional champions if it continues to operate as a juxtaposition of fragmented markets .

Mr. Chairman,
Distinguished Ministers,

Throughout the six-year of monitoring, I have been given the opportunity to gauge the scale of development, promotion and future of our markets and to what extent they have become part and parcel of your concerns.

I have also sensed your commitment to joining hands with FANAF in order to meet all challenges facing our business, noting with great pleasure the multifaceted support and the undivided attention you have always manifested to our concerns.

I have no doubt that you will continue to endeavor with the same energy along with the new executive board that will have the difficult and challenging mission to pursue our joint undertaking to serve the business of the invisible.

To each and all of you, I express my heartfelt gratitude and acknowledgement.

Long live FANAF,
Long live CIMA
Long live African insurance
Thank you.

FANAF’s President Protais Ayangma

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