Insurance laws Mozambique
Mozambique's insurance regulatory landscape is undergoing significant changes and modernization. The country is actively working to align its insurance laws with international best practices, particularly in light of recommendations from the Financial Action Task Force (FATF) regarding anti-money laundering and combating the financing of terrorism (AML/CFT).
Here's a breakdown of the key aspects of insurance laws in Mozambique:
1. Current Regulatory Body: Instituto de Supervisão de Seguros de Moçambique (ISSM)
The ISSM was established in 2010 under Decree-Law No. 1/2010, of December 31, which also approved the Legal Regime for Insurance (Regime Jurídico dos Seguros).
The ISSM is the primary supervisory and regulatory authority for the insurance and reinsurance sector, and insurance mediation, in Mozambique. It operates under the tutelage of the Minister of Finance.
Its responsibilities include licensing, supervision, and issuing technical norms.
2. Key Legislation:
Decree-Law No. 1/2010, of December 31 (Legal Regime for Insurance): This is the foundational law for the insurance sector. It covers institutional aspects (conditions for access and exercise of insurance activity and mediation) and material aspects (insurance contracts).
Decree No. 30/2011, of August 11 (Regulation of the Conditions of Access and Conduct of the Insurance Activity and Respective Mediation): This decree details the implementation of the Legal Regime for Insurance, setting out specific requirements for licensing, operation, technical provisions, solvency margins, and suitability of shareholders for insurance companies and intermediaries.
Other Related Legislation:
Motor Vehicle Third-Party Liability Insurance: This is compulsory in Mozambique for any vehicle circulating on national roads, regardless of local or foreign registration. Specific regulations govern its scope and minimum coverage.
Work Accidents and Occupational Diseases Insurance: This is also a compulsory insurance, covering injuries, functional disturbances, or diseases resulting from accidents at work.
Sports Insurance and Condominium Insurance: These are also mandated by law.
Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Legislation: Mozambique has been actively updating its AML/CFT framework. Recent legislation like Law No. 14/2023, of August 28, and Decree No. 53/2023, of August 31, along with ISSM directives (e.g., Aviso n.º 1/CA-ISSM/2023, of October 25), apply to the insurance sector, requiring robust due diligence and reporting mechanisms to prevent financial crimes.
3. Recent Developments and Future Outlook (as of mid-2025):
Creation of a New Supervisory Authority: The Mozambican government is in the process of creating a new body, the Insurance and Pension Funds Supervisory Authority of Mozambique (ASFPM). This new authority will replace the ISSM and aims to consolidate the supervision of both insurance and pension funds. This move is driven by the need to:
Comply with FATF recommendations to exit the 'Grey List'.
Align the regulatory framework with principles from the International Association of Insurance Supervisors (IAIS) and the International Organization of Pension Supervisors (IOPS).
Strengthen transparency and combat money laundering and terrorist financing in the insurance and pension fund sectors.
Review of the Insurance Legal Framework: Alongside the creation of the ASFPM, the government is undertaking a comprehensive review of the existing insurance legal framework. This review aims to:
Introduce legislative reforms appropriate to current market dynamics.
Incorporate principles and good governance practices from international organizations.
Establish the role of a "customer ombudsman" to streamline conflict resolution in insurance contracts.
Redefine rules for risk distribution in reinsurance operations.
Expand the range of offenses related to the exercise of insurance activity.
Key Features of the Mozambican Insurance Market:
Market Growth: The insurance sector in Mozambique has been growing, with an increase in business volume and the number of operators (reportedly 20 insurance companies in 2024).
Foreign Investment: 100% Foreign Direct Investment (FDI) is permitted in the Mozambican insurance industry. Foreign insurers can establish branches if they comply with ISSM rules and standards.
Non-Admitted Insurance: Non-admitted insurance is generally permitted by the ISSM only when domestic insurers are unable to provide the required coverage.
Licensing: Insurers require separate licenses for life and non-life business, a change introduced around 2003.
In essence, Mozambique is actively modernizing its insurance laws and regulatory structure to enhance stability, ensure consumer protection, and combat financial crime, reflecting a broader commitment to strengthening its financial sector.
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