CIMA’s organization and role

The establishment of CIMA has set out several objectives, the main one being the organization, supervision and control of the insurance industry in the French-speaking sub-Saharan African countries.

The establishment of a policy of harmonization and unification of legislative and regulatory provisions is also among the priorities of the new structure.

CIMA’s organization

CIMA is wrapped around three bodies: the Council of Ministers of Insurance, the Regional Insurance Control Commission (CRCA) and the General Secretariat.

• The Council of Insurance Ministers is the legislative body. Composed of the ministers in charge of the insurance sector, the Council meets in ordinary session twice a year.
  Main powers vested in the Council of Ministers of Insurance:
• designing of the general policy of the insurance sector,
• drafting and amending regulatory provisions,
• designating the heads of CIMA's structures.
• The Regional Insurance Control Commission (CRCA) is the regulatory body tasked with supervising and controlling insurance companies. This supranational authority meets four times a year to rule on the situation of insurance companies.
• The General Secretariat is a technical body tasked with the preparation, execution and follow-up of the work and decisions of the Council of Ministers and the CRCA.

In addition to the above three bodies, CIMA employs a corps of insurance supervisors, who are responsible for carrying out permanent documentary and on-site inspections of the insurance companies of Member States.

CIMA’ role

Since its establishment, CIMA has been endowed with supervisory powers which include granting approvals, monitoring the solvency of companies, imposing sanctions on these companies, withdrawing approvals, etc.

The insurance supervisory authorities of member countries are affected by the decisions taken by CIMA, and must ensure their due implementation.

In its quest for a better structural balance of the market, CIMA is up against:

• inefficient management policies,
• the sector’s poor image,
• the inadequacy of national supervision and control resources,
• the persistence of exorbitant corporate overhead costs,
• the slow pace characterizing claims settlement.

In an effort to overcome the recurrent hardships in the markets, CIMA has set itself the objectives of:

• improving the services delivered by insurance companies,
• strengthening the retention of premiums by insurance and reinsurance companies,
• strengthening the solvency of member companies,
• strengthening the economic role of insurance companies and promoting investment,
• ensuring the training of executives to better meet the needs of the companies and administrations of the Member States,
• harmonizing and standardizing insurance law.

CIMA’s main accomplishments

After three decades of existence, CIMA's record is more than encouraging. The organization has succeeded in structuring the insurance market of member countries, providing it with a harmonious legal framework and a common supervisory authority. CIMA has also strived to improve the balance of institutional mechanisms and compliance with prudential standards.

Five major successes can be attributed to CIMA, namely:

• Cleaning up the market: From 1995 to 2020, the CRCA withdrew the licenses of 37 insurance companies. It is noteworthy that license withdrawal is the most severe sanction provided for by the Insurance Code. Other disciplinary measures have also been taken against companies and some of their executives.
• The establishment of a single legal framework endowed with consistent management and organizational standards.
• The promotion of sound insurance operations practice with the main objective of reducing management costs and settling claims promptly. Thus, CIMA has managed to reduce the management cost rate from 40.7% in 2011 to 37.1% in 2020. However, despite its improvement, this rate is still high compared to international standards.
• Market consolidation and strengthening the financial base of insurers. The CRCA, the regulatory body, is carrying out several increases in the minimum share capital of insurance companies, raising it from 250 million FCFA in 1995 to 3 billion FCFA since May 2019 to climb to 5 billion FCFA in May 2019.

Evolution of the minimum share capital or of the establishment fund of insurance companies in the CIMA zone

⁽¹⁾ The second phase of the capital increase for non-life insurance companies has been postponed for three years, to the end of 2024. For life companies, the capital increase operation has been suspended.
Source : https://cima-afrique.org/final-press-release-of-the-council-of-ministers-bissau-2020/?lang=en [7]

• Fifth outstanding success: investors are no longer reluctant to invest in the region. By cleaning up the market and providing it with a stable and coherent legal framework, CIMA has been able to attract new players to boost the insurance business.