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The Insurance Industry in Mauritius

INSURANCE INDUSTRY REINSURANCE INSURANCE PREMIUMS LIFE INSURANCE TAX INCENTIVES HOUSING FINANCE COMMERCIAL RISKS RISK MANAGEMENT GOVERNMENT SECURITIES COMPETITIVENESS PROFITABILITY REGULATORY FRAMEWORK SOLVENCY EARLY WARNING SYSTEMS INTERVENTION REINVESTMENT ACCOUNTING ACCOUNTING STANDARDS ACQUISITION COSTS ACTUARIES AFFILIATED COMPANIES AGENTS ANNUITY ASSET DIVERSIFICATION ASSETS AUDITORS BALANCE SHEETS BODILY INJURIES BODILY INJURY BONDS BROKERS CAPITAL REQUIREMENT CAPTIVE INSURANCE CAPTIVE INSURANCE COMPANIES COMMISSIONS COMPENSATION CONSOLIDATION CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE COVERAGE DEPOSITS ECONOMIC ACTIVITY ECONOMIC GROWTH EQUITY CAPITAL FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL RATIOS FINANCIAL SERVICES FIRE INSURANCE FOREIGN ASSETS GENERAL INSURANCE GOVERNMENT SECURITIES HOUSING HOUSING FINANCE INCOME INFLATION INSURANCE INSURANCE CLAIMS INSURANCE COMPANIES INSURANCE INDUSTRY INSURANCE MARKETS INSURANCE POLICIES INSURANCE PREMIUMS INSURANCE REGULATION INSURANCE SUPERVISION INSURERS INTANGIBLE ASSETS INTEREST RATES INTERNAL CONTROLS INTERNATIONAL ACCOUNTING STANDARDS LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUIDATION MARGINAL TAX RATES MORTGAGE LOANS MOTOR INSURANCE NEGATIVE EQUITY NONPROPORTIONAL REINSURANCE PENSION PENSION FUNDS PENSION SCHEMES PENSIONS PREMIUMS PRIVATE PENSION FUNDS PRODUCT LIABILITY PROFITABILITY PRUDENTIAL REGULATIONS REGULATORY FRAMEWORK REINSURANCE REINSURERS REINVESTMENT RISK RESERVES RETURN ON ASSETS RETURN ON EQUITY RISK MANAGEMENT SCHEMES SECURITIES SOLVENCY SUBSIDIARIES SUBSIDIARY SUPERVISORY FRAMEWORK TRANSPORT UNDERWRITING REINVESTMENT ACCOUNTING
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World Bank, Washington, DC
Africa | Mauritius
2014-05-12T20:30:24Z | 2014-05-12T20:30:24Z | 2003-04

The insurance industry is relatively well developed. It makes extensive use of reinsurance facilities and is free from the pervasive premium, product, investment, and reinsurance controls that have bedeviled the insurance markets of so many developing countries around the world. Total premiums amounted in 2001 to 4.1 percent of GDP, while insurance company assets were equivalent to 18 percent of GDP. Life insurance, which has been favored by generous tax incentives and has also benefited from the growth of pension business and housing finance, represents 61 percent of total premiums. Nonlife business is also well organized. Large industrial and commercial risks are reinsured with top international companies, while motor insurance, which is the largest class of business with 45 percent of total nonlife premiums, does not suffer from high loss ratios or unduly long delays in settlement. Investment limits are generally sound and, with some small but important exceptions, effectively nonbinding. There is no minimum requirement for investment in government securities. Investment in overseas assets is limited to 25 percent of total assets, except for foreign life companies and general insurance business which are not allowed to invest in overseas assets. The insurance sector is highly concentrated. The three largest groups have 76 percent of total assets. Despite the high level of concentration, the insurance industry appears to be competitive, operating with high efficiency and re Despite the high level of concentration, the insurance industry appears to be competitive, operating with high efficiency and reasonable profitability. Large and medium-size companies have strong reserves, appropriate reinsurance arrangements, and good profitability. However, several of the smaller companies have weak financial ratios and suffer from long delays in settling claims. Insurance regulation and supervision is entrusted to the Financial Services Commission (FSC). The current regulatory framework has many strong elements, including reliance on solvency monitoring, prudent asset diversification, international accounting standards, and actuarial methods. But there are some important gaps in corporate governance, internal controls, and risk management. In addition, solvency ratios are below international standards and do not include modern risk-based capital requirements. These gaps are already being addressed in two new draft insurance bills which contain many highly modern provisions. Implementing regulations on solvency and actuarial standards need to be developed. Insurance supervision has been invigorated since the creation of the FSC, but further strengthening is required. It needs to emphasize risk management and internal controls, to develop an early warning system, and to establish clear procedures for early and effective intervention. The FSC should require actuaries to report on the reinvestment risk faced by insurance companies and their exposure to a large and persistent fall in interest rates.

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