The content of insurance contracts, pricing, corporate governance and the solvency of insurance companies. These are the four essential points on which the Congolese Regulator of the insurance sector watches. Objective: to ensure the protection of consumer rights and the prevention of systemic risk with a view to establishing a dynamic, inclusive, fair market that complies with international standards.
The Breakfast Connexion program and its partners including Top Congo FM, B-Map and Zoom Eco gave the opportunity to the Director in charge of Control and Regulation of the Authority for Control and Regulation of Insurance (ARCA), Robert Matungala to interact with economic operators on the stakes of the missions assigned to their institution.
Regulation and control
According to this ARCA framework, regulation consists of designing the prudential norms governing insurance activities. This means that the regulator’s function is to put in place the rules governing the activities of insurers.
Control, meanwhile, is to apply the prudential rules and ensure compliance with them, especially since the controller’s mission is to apply the standards to insurance companies and verify compliance with them.
« All the action of the supervisory authorities is geared towards prevention. The goal is to avoid failures of insurance companies. An innovative and credible insurance market can only derive from a regulation designed a priori. Because, it is the regulation which, to be effective, must derive from an innovating and credible market », he indicated.
At the ARCA, reassures Robert Matungala, everything is implemented so that the regulation adapts to the reality of the market, to the reality of the products, to the reality of the techniques of coverage of the commitments. This gives the Regulator the advantage of being constantly attentive to the market in order to incorporate, in real time, market innovations, concerning both insurance products and financial products.
He stressed that « the more regulation is – up to day – and includes the latest market innovations, the more it promotes the competitiveness of companies and reinforces their ability to cover their commitments. By being attentive to the market and attentive to the needs of the industry, the ARCA will provide them with ad hoc responses. »
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Two types of control
First, the documentary audit, which requires any insurer to provide ARCA with all the information required to carry out its permanent control mission in order to verify the financial strength of the company. Robert Matungala mentioned statistical and financial reports and information on his governance.
« Permanent control allows early detection of failures. The information is processed quickly and thoroughly. If deficiencies are detected, the ARCA directs the insurer to take corrective action », he said.
Then there is the on-the-spot check. This inspection will allow ARCA to have information and detect problems that can not be obtained or detected through remote inspection. The frequency of programming will be high among insurers with financial difficulties, while the duration depends on the nature, size and complexity of the controlled insurer.
For Robert Matungala, « these controls are important. Because, they can sometimes reveal hidden problems, or problems that the insurer ignores. They give the controller the opportunity to interact directly with the insurer. When problems are identified, the ARCA prepares a report, discusses with leaders, and stops corrective actions. «
The ARCA will be required to take sanctions proportionate to the seriousness of the breaches when the measures enacted are not applied by the insurance company.
« These measures can range from warning, reprimand, the limitation of all or part of the operations, the suspension or resignation of the responsible officers, a fine, withdrawal of approval leading to the liquidation of the company insurances », insisted the Director of Control and Regulation.
Eric TSHIKUMA
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