The Mauritius IFC boasts a well-developed Insurance sector; it is regulated and supervised by the Financial Services Commission (FSC) under the Insurance Act 2005. The current regulatory framework has many strong elements, including reliance on solvency monitoring, prudent asset diversification, international accounting standards, and actuarial methods.
The well-developed insurance industry in Mauritius comprises of 24 companies and contributes to 3.1% to the GDP.
Insurance Business in Mauritius
• Long Term Insurance Business means life insurance, pension and permanent health insurance business.
• General Insurance Business: insurance business other than long term insurance business whereby policies are delivered with respect to Accident & Health, Engineering, Guarantee, Liability, Motor, Property, Transportation.
• External Insurance Business: Corporation engaged in insurance business, including captive insurance business, restricted solely to non-Mauritian policies.
In 2014, total assets of Life and General insurance companies reached 33.7% of GDP whereas the Long Term Insurance category held assets totaling USD 3.92 Billion.
There is no minimum requirement for investment in Government securities. Investment in overseas assets are 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.
Following the enactment of the Captive Insurance 2015, the legislative framework has been set for the establishment and management of pure captive vehicles in Mauritius.
The captive Insurance Law is a fine and modern piece of legislation which should establish the jurisdiction as a domicile of choice for captive insurers focusing on Africa and why not Asia too.
The Act only applies to “pure captives” meaning the business of undertaking liability restricted to the risks of parent and affiliated corporations. The Insurance Act 2005 which has now been amended was previously governing captives but unfortunately not in a satisfactory manner. Captive insurers will be regulated by the Financial Services Commission and can also be licensed as Global Business Companies Category I.
Mauritius offers an attractive and stable environment for captive insurance companies. The Captive Insurance business has become an ever increasing method for companies to manage their annual premium payments with sustained and continued growth over the past decade. There are over 5,700 captives worldwide writing a total of more than USD 55 billion of premiums annually.
A captive is a wholly owned subsidiary created to provide insurance to its parent company and group. It is essentially a form of self-insurance where the insurer is owned by the insured. It reduces costs and risk management and enhances risk control. These captives do not offer insurance to the public. They do not cover life insurance business or items such as liability for motor vehicles.
The Financial Services Commission, Mauritius (the ‘FSC’) is the integrated regulator for the non-bank financial services sector and global business. Established in 2001, the FSC is mandated under the Financial Services Act 2007 and has as enabling legislations the Securities Act 2005, the Insurance Act 2005 and the Private Pension Schemes Act 2012 to license, regulate, monitor and supervise the conduct of business activities in these sectors. The current regulatory framework has many strong elements, including reliance on solvency monitoring, prudent asset diversification, international accounting standards, and actuarial methods.