Insurers seek solutions to delays in approving foreign currency transfers

BY Business a.m.

Following some difficulties faced in the implementation of foreign exchange regulations that were officially put in place since March 1, 2019 by Bank of Central African States (BEAC), a meeting has been held by CIMA (Inter-African Confederation of Insurance Markets) and insurance and reinsurance companies in the CEMAC zone with the central banker.

The insurance and reinsurance sector is reported as being among those negatively impacted by the reform that imposes stricter rules on currency transfers and payments on the CEMAC member states of Cameroon, Central African Republic, Republic of Congo, Gabon, Equatorial Guinea and Chad.

The sector had long registered its displeasure with the restrictions that appear to have been imposed on it. It had registered its displeasure with the long delays in the transfer of premiums between an insurer and a reinsurer, according to one report.

Andrew Gwodog, managing director of SCG-Re and president of the Gabonese Federation of Insurance Companies (FEGASA), “These transactions take a little longer in a sector where operations should be settled quickly. When you have to pay a premium to a reinsurer even in the sub-region, when it takes time, and if a claim occurs, the latter will argue the absence of premium payment, not because you are unable to pay, but because the processing times taken are sometimes made very long (because of regulations).

“Before these provisions, the operation was carried out in 48 or 72 hours. Despite the insurers’ efforts, we spend more time requesting express authorisations for transfers, sometimes even for branches for which the provisions of the CIMA Code do not require us to request authorisation from any authority,” he said, it

Standardisation

The insurers and reinsurers of the sub-region, “unanimously” want standardisation of the transaction documents requested by the different banks. “From one bank to another, we don’t have the same types of documents.” Gwodog.

Various business sectors in CEMAC states have voiced reservations about some provisions in the new regulations that were first debated in 2014, following a sudden drop in oil prices.

CIMA unifies the regulation and supervision of the insurance industry among its member states, Currently, there are 15 members. Apart from the six CEMAC states, the other members are Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal, Togo, and Madagascar.