Africa, CIMA zone: capital increase

Magazine Issue:

The GAIF, between lights and shadows [3]

Magazine date:

May 2016

Last April 8, the Council of Ministers for the Inter African Conference of Insurance Markets (CIMA) adopted a new law setting the minimum capital of insurance companies which goes from 1 up to 5 billion FCFA (1.6 to 8.3 million USD) for non-mutuals.

Photo credit: PublicDomainPictures Operational insurers have a period of three years in order to comply with the new regulation. Mutual companies are also targeted, having to come up with an initial capital above 3 billion FCFA (5 million USD).

Existing mutuals have also been granted a three-year period in order to ensure that their initial capital would amount to a minimum of 2 billion FCFA (3.3 million USD), and a five-year period to attain the 3 billion FCFA (5 million USD).

These provisions, due to come into force upon publication of the new law, will profoundly alter the insurance market in the CIMA Zone by promoting mergers and acquisitions in this sector.