IUMI 2018 COMPULSORY CARGO INSURANCE LAW IN AFRICA: OPPORTUNITIES FOR LOCAL PARTNERSHIP Sory Diomande Africa Re 18 September 2018
CONTENT 1. OBJECTIVES OF THE PRESENTATION 2. COMPULSORY CARGO INSURANCE LAW - OVERVIEW OF THE IMPLEMENTATION IN AFRICA 3. THE EXPERIENCE IN THE CIMA ZONE 4. PARTNERSHIP IN THE CIMA COUNTRIES 5. CONCLUSION
OBJECTIVES OF THE PRESENTATION
OBJECTIVES OF THE PRESENTATION 1 2 3 4 Show a snapshot of the countries where marine cargo importation insurance is mandatory Present the successful experience in the CIMA countries Demonstrate the opportunities the African continent offers for a win win partnership between local and international actors in the marine and insurance sectors Lay emphasis on the positive enabling environment which ensures that partnership is very effective, notwithstanding the challenges
COMPULSORY CARGO INSURANCE: AN OVERVIEW OF THE IMPLEMENTATION IN AFRICA
COMPULSORY CARGO INSURANCE LAWS IN AFRICA Morocco Tunisia Algeria Libya Mauritania Mali Senegal Niger Bissau Guinea Burkina Faso Nigeria Ivory Coast Ghana Cameroon Benin Togo Gabon Chad Central African Republic Congo Ethiopia Kenya Rwanda Burundi CIMA Countries Non CIMA Equatorial Guinea Angola
COMPULSORY CARGO INSURANCE: THE SUCCESFUL EXPERIENCE IN THE CIMA COUNTRIES
CARGO IMPORTATION: MAIN PROVISIONS IN THE CIMA CODE Article 278 of the CIMA Code: Mandatory insurance on Cargo importation Cargo insurance is mandatory and is to be taken out in the country of importation, subject to the provisions of the law and regulation of that country At the origin, in the 60s, the UNCTAD intended to introduce mandatory cargo insurance domiciled in the country of importation The WTO brought in a liberalization and some countries withdrew the mandatory insurance, then brought it back The article 278 was enacted to reinforce the implementation of the mandatory insurance and domestication
CARGO IMPORTATION: MAIN PROVISIONS IN THE CIMA CODE Article 308 of the CIMA Code: Local content law Cargo, Motor, Life & Health, Accident Marine Hull & Oil Rigs, Aircraft, Trains and Liability thereof Other Classes Reinsurance to be placed 100% in the CIMA zone Reinsurance can be placed 100% outside of the CIMA zone A minimum of 50% to be reinsured in the CIMA zone. Derogation in excess of 50% No derogation possible No need for derogation
CARGO IMPORTATION: MAIN PROVISIONS IN THE CIMA CODE No insurance cover can be granted in the CIMA countries before full payment of the annual premium, or the instalment due This provision has made premium collection pattern the central point of solvency assessment Cargo importation: controls occur at customs Article 13 of the CIMA Code: No Premium No Cover This article applies to all classes of business Brokers are no longer allowed to keep the premium For open cover policies, there is some tolerance and arrangements are possible
PARTNERSHIP OPPORTUNITIES BETWEEN LOCAL AND INTERNATIONAL PLAYERS
AFRICA IS A VERY BIG IMPORTER Food (>$35bn/annum) Refined/Crude Petroleum Raw Sugar Special Purpose ships Packaged medicaments Military weapons Wheat Helicopters, planes Etc.
PARTNERSHIP OPPORTUNITIES Capacity is extended through coinsurance at regional level, and reinsurance Rules and practices are well structured and known International expertise and experience to offer a good standard of service. Governance in insurance companies and broking firms has strengthened Mature, harmonized, safe and transparent legal framework Technology for effective customs control and law enforcement
PARTNERSHIP OPPORTUNITIES Regulatory Certainty, Better Governance, Premium credit regulation Africa is open to international collaboration and partnership in Marine Cargo business
CONCLUSION
CONCLUSION Doing business in Africa can be challenging The local content laws are constraining for foreign players However Africa offers great opportunities for those who come with a partnership mindset -Governance and ease of doing business are improving very rapidly -Africa is certainly the next economic engine room for the world -Areas such as the CIMA zone offer high security for cargo importation and insurance -Africa is very open to collaboration and partnership
THANK YOU Sory Diomande Africa Re 18 September 2018