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Corporate Governance and Compliance in Comoros

Comoros, a developing island nation located off the coast of East Africa, boasts a growing insurance sector within its economy. The country’s regulatory framework for insurance is overseen by the Ministry of Commerce and Industry.

Legislation Overview

The key pieces of legislation governing the insurance industry in Comoros are:

  • Insurance Law No. 1999-005: This law regulates the insurance sector and provides a framework for the establishment and operation of insurance companies.
  • Regulation on Insurance Companies No. 2001-001: This regulation sets out the requirements for insurance companies to obtain a license and operate in Comoros.

Compulsory Insurance

The following types of insurance are compulsory in Comoros:

  • Motor third-party liability insurance: All motor vehicles operating in Comoros must be insured against third-party liability.
  • Aviation liability insurance: All aircraft operating in Comoros must be insured against liability.
  • Marine liability insurance: All ships and boats operating in Comoros must be insured against liability.

Non-Admitted Insurance Regulations

Comoros allows non-admitted primary insurance but requires a local broker to be involved when placing a policy on a cross-border basis. Fronting is permitted, and global policies are allowed with the use of DIC/DIL for issue permitted.

Company Registration and Operation

To establish an insurance entity in Comoros, the following requirements must be met:

  • License: A license is required to operate an insurance company in Comoros.
  • Minimum capital requirements: The minimum capital requirement for an insurance company is COMOROS Francs (FC) 100 million.
  • Solvency margins: Insurance companies must maintain a solvency margin of at least FC 50 million.

Taxation

The tax rates on insurance premiums in Comoros are:

  • Direct taxation: 10% of gross premium income
  • Indirect taxation: 2.5% of gross premium income

The legal system in Comoros is based on the French civil law system, with a hierarchical court structure and a Supreme Court as the highest court.

Insurance Industry

The insurance industry in Comoros is relatively small but growing rapidly. The main types of insurance products offered are:

  • Life insurance: Life insurance policies are popular among Comorans, who use them to save for future needs.
  • Non-life insurance: Non-life insurance policies, such as motor and property insurance, are also widely available.

Reinsurance

Comoros has a reinsurance market that provides coverage for insurance companies operating in the country. The main types of reinsurance products offered are:

  • Facultative reinsurance: Facultative reinsurance allows insurance companies to purchase reinsurance on a case-by-case basis.
  • Treaty reinsurance: Treaty reinsurance provides comprehensive coverage for a group of policies.

Regulatory Framework

The regulatory framework for the insurance industry in Comoros is governed by the Ministry of Commerce and Industry. The main regulations that govern the industry are:

  • Insurance Law No. 1999-005: This law regulates the insurance sector and provides a framework for the establishment and operation of insurance companies.
  • Regulation on Insurance Companies No. 2001-001: This regulation sets out the requirements for insurance companies to obtain a license and operate in Comoros.

Future Developments

The future of the insurance industry in Comoros is looking promising, with a growing demand for insurance products and an increasing number of insurance companies operating in the country. The government has also taken steps to improve the regulatory framework and encourage foreign investment in the sector.