The Central Bank of Liberia (CBL) has stated that the ongoing implementation of the capital requirements for all licensed insurance companies operating in Liberia remains on course in line with the CBL regulation issued in 2015 and amended in 2016.
The regulation sets the capital requirement for each class of insurance business, and requires each insurance company to maintain a minimum capital requirement based on the category of insurance activity being undertaken by a company. Under the regulation, General/Non-Life Insurance Business, must maintain a minimum capital requirement of U$ 1.500, 000.00 (One million Five Hundred Thousand U.S. Dollars); Life Insurance Business, a minimum capital requirement of US $750,000.00 (Seven-Hundred Fifty Thousand U.S. Dollars); and Reinsurance, a minimum capital requirement of US $5,000,000.00 (Five-Million U.S. Dollars).
The CBL said in a public notice that the implementation of the regulation which began September 30, 2016, is being executed in stages, on a quarterly basis, over a period of three years to allow for flexibility.
The implementation of the capital requirements is part of the reform agenda of the CBL, aimed at strengthening the insurance sector by ensuring safety and soundness of the industry through adequate capitalization, strong corporate governance, adequate risk management and reinsurance arrangements, among others. The move the Bank noted is in line with its mandate under the New Insurance Act of 2013 as the Regulator and Supervisor of the Insurance Industry of Liberia.
The CBL assured policy holders, creditors and the general public engaged in business with the insurance industry, that the implementation of the revised capital requirement is intended to ensure that insurance companies operating in Liberia are adequately capitalized at all times to meet their claims and other future obligations under their insurance policies as well as unexpired risks as and when they are due.
“The CBL will remain resolute in reforming the Liberian insurance industry in line with its mandates under the New Insurance Act of 2013 and other Insurance laws,” the Bank said in its public notice.