DEVELOPING A REGULATORY INFRASTRUCTURE FOR A STABLE AND THRIVING INSURANCE INDUSTRY IN AFRICA

1. DEVELOPING A REGULATORY INFRASTRUCTURE FOR A STABLE AND THRIVING INSURANCE INDUSTRY IN AFRICA AlhajKaddunabbi Ibrahim Lubega Chief Executive Officer INSURANCE REGULATORY AUTHORITY OF UGANDA ira@ira.go.ug

2. REGULATORY CHALLENGES IN AFRICA • Absence of/inadequate capacity to undertake risk analysis and measurement. • Inadequate application of information and communication technologies in insurance supervision activities. • A lack of historical data on insurance regulation . • Lack of actuarial capacity (professional education). • Low levels of insurance awareness, resulting in low levels of insurance penetration. • Liberalization of the pensions industry has been slow. • Premium rate undercutting in the market as a result of non-application of actuarial techniques in determination of premiums payable. ira@ira.go.ug

3. PRE – REQUITES FOR A SOUND INSURANCE INDUSTRY IN AFRICA Credit: USAID, Chemonics International Inc. & the International Insurance Foundation ira@ira.go.ug

4. KEY CONSIDERATIONS • Without strong regulatory framework, market efficiency will be elusive. • African regulators are still poorly resourced: • Poor market surveillance • Limited analytical and investigative capacities • For the most part, regulators have focused on insurers’ compliance with accounting prescriptions rather than the prudence of their management and actions and their overall financial risk. ira@ira.go.ug

5. PRINCIPLES THAT UNDERPIN A SOUND REGULATORY INFRASTRUCTURE THAT ACHIEVES LEGITIMATE POLICY AIMS Accountability Accountability Proportionality Consistency Transparent &Targeted ira@ira.go.ug

6. PRIORITIES FOR ACTION •  Identification of regulatory/policy/administrative constraints– “agenda setting”. • Consulting with the key stakeholders on the regulatory and policy agenda. • Receiving proposals for reform from the insurers, and dialoguing in a formal systematic and inclusive way on the insurer’s reform agenda. • Implementation of agreed policy and regulatory reforms. • Building capacity across Government, including at the local government level, in insurance markets, operations and products. • Improving delivery of regulatory services – (better enforcement, improving appeals processes,). ira@ira.go.ug

7. PREPARING FOR A STABLE AND THRIVING INDUSTRY Making a Case for Regulatory Impact Assessment & Reform ira@ira.go.ug

8. WAY FORWARD • Create an environment that encourages a stable and competitive insurance market serving the interests of both companies and policyholders. • Move toward risk based supervision in respect to an insurer’s specific risk profile (encompassing insurance, market, credit and operational risks). • Develop an early warning system for effective off-site surveillance. • Target on-site inspections basing on surveillance results. • Emphasize the importance of good corporate governance. • Regular review of adequacy and soundness of reinsurance arrangements . • Provide appropriate incentives for insurers to police their own practices and those of their agents, and provide an optimal amount of insurance. ira@ira.go.ug

9. “Coming together is the beginning. Keeping together is progress. Working together is success” Henry Ford ira@ira.go.ug