The Insurance Sector In Mauritius Law Company Business Partnership Essay

Published Date: 02 Nov 2017

Over the years, with the remarkable development in Mauritius, the insurance industry succeeded in keeping pace with the requirements of the market. The total number of insurers registered under the Insurance Act presently stands at 22. The insurance companies are tightly controlled by the Financial Services Commission (FSC), who regulates and supervise the industry. Presently, the industry offers a wide range of insurance products available on the market classified under motor, marine, fire, household, personal accident, travel, health, liability, engineering, casualty , life and pension among many other insurance innovative products to serve the market. The Mauritian insurance industry is highly concentrated with the three largest groups having 76% of the total assets. Despite the soaring level of concentration, this sector has proved to be highly competitive and operating with high efficiency and high profitability.

Insurance Companies in Mauritius:

BAI Co Ltd

CIM Insurance Ltd

CIM Life Ltd

Credit Guarantee Insurance Co.Ltd

GFA Insurance Ltd

Indian Ocean General Assurance Ltd

Island Life Assurance Co Ltd

Jubilee Insurance (Mauritius) Ltd

LAMCO International Insurance Limited

La Prudence (Mauricienne) Assurances Ltée

Life Insurance Corporation of India

Lloyd’s

Mauritian Eagle Insurance Company Ltd

Mauritian Eagle Life Company Limited

Phoenix Insurance (Mauritius) Ltd

State Insurance Company of Mauritius Ltd

SICOM General Insurance Ltd

Sun Insurance Company Limited

Swan Insurance Company Ltd

The Anglo-Mauritius Assurance Society Ltd

The Mauritius Union Assurance Company Ltd

The New India Assurance Company Limited

3.1.2 Insurance Brokers

Insurance brokers form an active part in the Mauritian Insurance sector as they represent about 30% of the industry in terms of clients. They are professionals who assess risk on behalf of their customers, advise on the mitigation of risks, identify which type of insurance policy from which insurer will better suit the needs of the clients and manage client portfolios well according to the risk they want to insure. Brokers have been highly involved in breaking down the traditional structure of the insurance market under which the placement of risks was dictated by the shareholdings that the major economic interests in Mauritius have in the various insurance companies. This resulted in a more flexible placing of risks with transparent tendering of official business.

The insurance brokers registered in Mauritius are:

1. Advay Ltd

2. A I Brokers & ConsultantsLtd

3. ADG Brokers Limited

4. BritAm Ltd.

5. Brokers Plus Ltd

6. Century Brokers Co. Ltd

7. Chartered Brokers Ltd

8. City Brokers Ltd

9. Cover-Age Co Ltd

10. Ebrokers Ltd

11. Geric Brokers Limited

12. Global Cover Ltd

13. Gras Savoye Brokers And Consultants Limited

14. Guy Leroux Brokers Ltd

15. Headlines Ltd

16. INRE Management Services Ltd

17. I-MEDIATE Ltd

18. London Brokers Ltd

19. Medibroker Ltd

20. MIB Ltd

21. NYC Specialist Brokers Ltd

22. Reinsurance Solutions (Mauritius) Ltd

23. Palaos Ltd

24. PriceGard Management Limited

25. Sindicom Brokers Ltd

26. Willis Re (Mauritius) Limited

3.2 Insurance Legislation

In 2001 the Mauritian parliament enacted the Financial Services Development Act 2001, the most important provision of which, from the point of view of the insurance industry was the setting up of the Financial Services Commission (FSC) to supervise all non-banking financial businesses, including domestic and offshore Insurance legislation started with the Insurance Act 2005, slightly amended by the Insurance Amendment Act 2007, which came into force on 28th September 2007. It was accompanied, on the same day by the Financial Services Act 2007, which affects global (offshore) businesses, such as any captive insurers registered in Mauritius, and the Securities Act 2005 (with 2007 amendments), which affects the investment components of insurers' businesses.

Together with the Financial Services Act 2007 and the Securities Act 2005, as amended by the Securities (Amendment) Act 2007, this legislation is intended to provide a consolidated licensing and supervisory framework for financial services other than banking. The most important changes brought in by the new legislation are:

Separation of long-term and short-term business, so that businesses wishing to conduct both types of business may only do so in separate companies

Strengthening standards concerning both funding and capital requirements of insurers. The proposed requirements will be based on each company's own risk profile, effectively risk-based capital.

Limitation of control (capping), which will mean that no person will be allowed to hold a number of shares sufficient to make him/her "significant" shareholder without approval from the regulator

Strengthening of corporate governance, including requirements that insurers have audit committees which include members independent of the company's board of directors; also the roles of actuaries and auditors is to be strengthened

Reviewing statutory returns to make it possible to identify adverse changes in an insurer's economic health as early as possible

Increasing consumer protection and giving the commission increased powers to force companies to cease "undesirable practices", as well as over matters such as winding up, transfer and amalgamation of insurance businesses.

Extending control to insurance brokers, including a requirement to maintain a separate account for insurance premiums collected.

3.3 Types of Licence

Under the new legislation companies will have to specialise in either general business or long-term business. Existing composite companies were required to split up by the effective date of the 1st January 2011 on which the new insurance act is amended to require a separation of long-term and general business.

Applications for a licence must include the classes which the applicant intends to insure.

The general business classes are: 2010

Accident and health

Engineering

Guarantee (surety)

Liability

Miscellaneous

Motor

Property

Transportation

The long-term business classes are:

Life insurance business

Pension business

Permanent health insurance business

Linked long-term insurance business.

The insurance legislation was followed by:

Insurance (Long Term Insurance Business Solvency) Rules 2007

Insurance (General Insurance Business Solvency) Rules 2007

Insurance (Statutory Reinsurer) Rules 2007

Insurance (Returns) Rules 2007

Insurance (Returns) Rules 2007 - First Schedule (1)

Insurance (Returns) Rules 2007 - First Schedule (2)

Insurance (Returns) Rules 2007 - Second Schedule

Insurance (Insurance Brokers) Rules 2008

3.4 The Mauritius Union Corporate Profile

3.4.1 Company’s Mission

The vision of Mauritius Union Group is to be recognised as a leader in the insurance sector and insurance related activities, offering better investment services and financial protection with integrity, trust and professionalism.

3.4.2 Company’s Values

The company’s core values are summarised in 3S which are strength, security and service. The Mauritius Union has built its strength on its 63 years history, resources, reputation and competencies to endlessly develop innovative products that focus on people's changing insurance needs in life.

3.4.3 The Mauritius Union Group

The Mauritius Union Group is among the largest insurance groups in Mauritius. With compliance to the insurance act 2007, the group operates in the General insurance business through The Mauritius Union Assurance Company and La Prudence Mauricienne Assurances Ltee for Life insurance (long term business). The group also holds two wholly-owned subsidiaries, the National Mutual Fund Ltd (NMF), and Feber Associates. The group is financially stronger with the taking over of La Prudence Mauricienne Ltee with different clusters such as underwriting, claims, logistics, investment, loans, marketing, finance, customer care, human resources and IT to support the operational activities of the group for a total of about 500 employees.

3.4.3.1 The Companies

The Mauritius Union Assurance Company Limited which was incorporated in 1948 is the oldest composite insurance company in Mauritius. The company is a public limited company which shares are listed on the Stock Exchange of Mauritius under the abbreviation MUA since the 14th December 1993. Since January 2011, the company is now known as Mauritius Union General Insurance to comply with the insurance act 2007 to become part of the Mauritius Union Group. The institution provides a large array of general insurance products for individuals as well as corporate such as motor insurance for motor vehicles, non-motor insurance like household comprehensive for householders, fire and allied Perils for commercial buildings, travel insurance, marine insurance, medical insurance, golf insurance, domestic appliances insurance, directors and officer’s liability, professional indemnity among many other products. Since the take over of La Prudence Mauricienne Ltee, the company is the market leader in general insurance business in Mauritius.

La Prudence Life Insurance

With the application of the insurance act 2007 and the taking over of Prudence Mauricienne Ltee by Mauritius Union, the company is now traded under the name La Prudence Life Insurance to provide a wide range of Life & Pension products. Since January 2011, the company is the merger between Mauritius Union life department and La Prudence life department to provide wide-ranging life insurance and pension expertise. The products offered by the company are life assurance, pension plan, education plan, investment plan, long-term loans and specialise in financing of property development projects through the MU Property Gold team with the collaboration of major real estate agencies.

The National Mutual Fund

The National Mutual Fund Ltd (NMF) was set up in 1990 as a joint venture between local private insurance companies and parastatal bodies to encourage savings among the Mauritian population. The company is the pioneer in Unit Trust investment in Mauritius, and gives local investors opportunity to have access to a wide choice of conventional asset classes through its two special unit trusts; the NMF Property Trust and the NMF General Fund, to help investors to build wealth. The company was one of the first major take over of Mauritius Union in 2010 with the acquisition of 95.71% of issued share capital.

Feber Associates

Feber Associates, the first professional pension fund management company setup in Mauritius was established in 1985. The company was founded by La Prudence Mauricienne Ltee founder Felix Maurel and Bernard Mayer, a member of board of La Prudence at that time, the name Feber is a mix up of Felix and Bernard names. The company was a wholly owned subsidiary of La Prudence Mauricienne and since the takeover of the company by Mauritius Union; the company is now a subsidiary of the Mauritius Union Group. The company offers valuable perception on all the complex features of pension plans by assisting small, medium and large enterprises in the implementation and management of pension funds and the management of investments.