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CBL Issues 9 New Regulations To Reform Insurance Industry
By Joseph Toe
MONROVIA, April 3 (LINA) - The Central Bank of Liberia (CBL) has issued nine new insurance regulations as part of the reform process of the insurance sector, according to a CBL report.
The 2016 Annual Report released recently indicated that the regulations require insurance businesses to be conducted with honesty, care, due diligence and skills to guarantee that policyholders and prospective policyholders are treated fairly at all times prior to and during the existence of an insurance contract.
The regulations, the report noted, are intended to ensure that insurers have adequate reinsurance coverage and to notify the requisite Authority prior to ceding any business, adding that insurers must retain at least 20.0 percent of the total liability to which they are exposed and reinsure the remaining liability.
According to the report, the regulations are also intended to strengthen financial reporting within the insurance sector with the objective to ensure timely reporting and publication of financial statements.
The report said the regulations also set specified accounting standards to be used as the basis for preparing financial statements and describing basic criteria for appointing an external auditor and an actuary, including the responsibilities of the actuarial function.
The regulations are also aimed at strengthening the capitalization of the insurance sector and enhancing public confidence with the objective to ensure that insurers are adequately capitalized at all times.
The regulations, according to the report, will strengthen corporate governance practices in the insurance sector that will promote higher ethical standards and enhance public confidence in the financial system.
This, according to the report, requires that licensed insurers notify the requisite authorities prior to opening or closing a branch or agency office and acquiring or incorporating a subsidiary.
The report stated that the regulations will strengthen liquidity in the insurance sector by ensuring that only insurance businesses for which at least 50.0 percent of premium has been received by the insurers will be covered and recognized as income on the books of the insurers.
“This regulation is intended to ensure adequate capitalization and solvency of the insurance sector at all times,” the report said.